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In the point a) the text say X is financed by 100.000 50c ordinary shares at es div market value of $1.30
When I calculate market value of the equity I considered:
E=100.000/0.50*1.3=$ 260.000In the answer it is:
E= 100.000*1.3=$ 130.000I do not understand the answer from the book. I there something that I did not understand correctly?
Thank you in advance
There are 100,000 shares.
The market value of each share is $1.30.
So….the total market value is 100,000 x $1.30 = $130,000.The nominal value of the shares is not relevant.
(If you had been told that the total value of the shares on the Statement of financial position was $100,000, then you would have been correct, because it would have meant that there were 200,000 50c shares. However the question did not say that – it said that there were 100,000 shares)
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