When a rights issue is made am I right that share capital is increase by nominal value of shares issues and the premium account by the amount over nominal value? So if 20000 £1 shares were issues at 1.50 (market value £2) share capital would increase by 20,000 and premium account by £10,000?
Can a rights issue be done at a figure below nominal or is this disallowed? Presumably if alowed the difference would be treated as bonus issue and taken from reserves?
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Rights issue - change in capital stucture
10y ago#1You are correct about share capital and share premium.
The rights issue cannot be at less than nominal value.
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