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Dear Tutor,
I can’t understand the solution in this question from the bpp revision kit question number 193.
Waffle had share capital of 7.5million in 50c equity shares at october 20×6 .
On january 20×7 it made an issue of 4 million shares at full market price immediately followed by a 1 for 3 bonus issye the financial statement at 30 september 20×7 showed profit for the year of 12 million .
Solution
1.10.x6. 15,000,000 3/12 4/3 5,000,000
1. 1.x7 4.000,000
19,000.000
Bonus issue 6.333.333
25.333.333. 09/12. 19.00000024.000000
Eps =120000000/24000000=0,50Why dont we multiply the 4000000 with the time aporrtioned and the bonus fraction ?
Why dont we multiply the 19.000.000 with the time aporrtioned time ?
And last but not least could you please guide me where i can learn more information on the difference between full market issue , rights issue ?
Thank you.
Hi,
The 4,000,000 is a full price issue but took place at the same time as the bonus issue. We only apply the bonus fraction to the shares in issue prior to the bonus issue taking place. So it is therefore only applied to the 15,000,000, given the 4,000,000 was at the same time and not before.
The 19,000,000 has been time apportioned as it is included in the figure of 25,333,333.
To find out more look through the lecture notes and the videos.
Thanks
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