share premium

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May 16, 2015 at 12:48 pm #246357
Steven
Member
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Hi Sir,

Not sure I understand how you got the 30 share premium in chapter 13 test question 5

Kind Regards

Steven
May 16, 2015 at 1:32 pm #246371
John Moffat
Keymaster
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After the bonus issue, there are 150M shares in issue.
The rights issue is of 2/5 x 150M = 60M shares.

The premium on each share is $1.50 – $1.00 = $0.50. So the total premium is 60M x $0.50 = $30M.
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