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Dear Tutor!
I do not understand the solution of test in chapter 13, question 2. Where from 750,000
appeared?Thank you!
At the start of the year there were 500,000 shares in issue.
They then had a rights issue of 1 for 2, so it means that they issued another 250,000 shares.
So now they have a total of 750,000 shares in issue.
They then have a bonus issue of 1 for 5, so they issue another 750,000/5 = 150,000 shares, which brings the total number of shares up to 900,000.
(I guess you have watched the free lecture that goes with this chapter. If not then you really must because the Course Notes are not to be used on their own – they are only of any use when used with the lectures (because they are lecture notes).)
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