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When there is an issue of shares for example in exchange or as a consideration for acquisition of a subsidiary how is the Share capital and share premium values calculated
Number of shares issued x by the nominal value of those shares issued. The share premium is the value placed on those shares less the nominal value.
So, 6million shares of $1 each with a value of $5 each would give rise to an increase in share capital of $6,000,000 and an increase in share premium of 6 million * ($5 – $1 ) = $24,000,000
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