A company is planning to raise funds by making rights issue of equity shares to finance its expansion. The existing share capital of the company is OMR 10 million consisting of equity shares of OMR 0.500 each. The market value of its share is OMR 2.50o. The company offered to its shareholders the right to buy 2 shares at OMR 1.500 each for every 5 shares held. 30% of the shareholders rejected the offer. Journalize the given entries show the necessary calculations and also the abstract of Balance sheet after such issue and calculate the theoretical ex - right price for the above scenario

A company is planning to raise funds by making rights issue of equity shares to finance its expansion. The existing share capital of the company is OMR 10 million consisting of equity shares of OMR 0.500 each. The market value of its share is OMR 2.50o. The company offered to its shareholders the right to buy 2 shares at OMR 1.500 each for every 5 shares held. 30% of the shareholders rejected the offer. Journalize the given entries show the necessary calculations and also the abstract of Balance sheet after such issue and calculate the theoretical ex - right price for the above scenario

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 12P

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Globex Corporation plc shares are currently trading at $5.00 each. Management wishes to raise capital to expand the business and announces a rights issue. Existing shareholders will be given the right to purchase one share at $3.00 for each three shares currently held. Which of the following statements is correct?a. The ex rights share price is £2.00 and the value of one right is £3.00b. The ex rights share price is £4.17 and the value of one right is £2.00c. The ex rights share price is £4.50 and the value of one right is £0.50d. The ex rights share price is £5.00 and the value of one right is £2.00e. None of the above
Please answer this problem and provide complete solution in good accounting form. Thank you! Victory Company issued 8,000 ordinary shares with P200 par value and 20,000 preference shares with P200 par value for a total consideration of P7,500,000. At the date of issue, the ordinary share was selling for P360 and the preference share was selling for P270. What is the share premium from the issuance of ordinary shares?
A company was formed on 1 March 2018 with an authorized capital of OMR 5 million divided into common stock of OMR1 each. The company came up with an Initial Public Offer IPO by issuing 2 million equity shares at OMR 1 each. The amount of Share capital account to be shown on the balance sheet at the end of the year 31st December 2018 assuming that IPO is under subscribed by the public was 1,800,000 as on 31st December 2018. a. The IPO should be cancelled as per Oman Commercial Companies Law b. OMR200,000 c. OMR2,000,000 d. OMR1,800,000\\
Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue300,000 ordinary shares on the following terms:Application RM1 per share Allotment RM2 per shareCall as required RM1 per shareTo the end of August, applications for 350,000 shares had been received together withthe application money due on each share. One applicant for 5,000 shares had forwardedRM20,000 in full payment of the shares.On 15 September, the directors proceeded to allot 300,000 ordinary shares on thefollowing basis. Applicants for 30,000 shares were refunded their application money infull, 5,000 shares were allotted to the applicant who paid for the shares in full, and theother successful applicants were allotted the remaining shares, excess application moneybeing transferred to allotment.On 7 October, all allotment money had been received.A first and final call was made on 1 November, and all call money was received by 30November with the exception of the amount due on 6,000 shares.Required:(a)…
Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue300,000 ordinary shares on the following terms:Application RM1 per share Allotment RM2 per shareCall as required RM1 per shareTo the end of August, applications for 350,000 shares had been received together withthe application money due on each share. One applicant for 5,000 shares had forwardedRM20,000 in full payment of the shares.On 15 September, the directors proceeded to allot 300,000 ordinary shares on thefollowing basis. Applicants for 30,000 shares were refunded their application money infull, 5,000 shares were allotted to the applicant who paid for the shares in full, and theother successful applicants were allotted the remaining shares, excess application moneybeing transferred to allotment.On 7 October, all allotment money had been received.A first and final call was made on 1 November, and all call money was received by 30November with the exception of the amount due on 6,000 shares.Required:(a)…
Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue300,000 ordinary shares on the following terms:Application RM1 per share Allotment RM2 per shareCall as required RM1 per shareTo the end of August, applications for 350,000 shares had been received together withthe application money due on each share. One applicant for 5,000 shares had forwardedRM20,000 in full payment of the shares. On 15 September, the directors proceeded to allot 300,000 ordinary shares on thefollowing basis. Applicants for 30,000 shares were refunded their application money infull, 5,000 shares were allotted to the applicant who paid for the shares in full, and theother successful applicants were allotted the remaining shares, excess application moneybeing transferred to allotment. On 7 October, all allotment money had been received.A first and final call was made on 1 November, and all call money was received by 30November with the exception of the amount due on 6,000 shares.…
Penne Pharmaceuticals sold 8 million shares of its $1 par common stock to provide funds for research and development. If the issue price is $12 per share, what is the journal entry to record the sale of the shares?
Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue 300,000 ordinary shares on the following terms: Application RM1 per share Allotment RM2 per share Call as required RM1 per share To the end of August, applications for 350,000 shares had been received together with the application money due on each share. One applicant for 5,000 shares had forwarded RM20,000 in full payment of the shares. On 15 September, the directors proceeded to allot 300,000 ordinary shares on the following basis. Applicants for 30,000 shares were refunded their application money in full, 5,000 shares were allotted to the applicant who paid for the shares in full, and the other successful applicants were allotted the remaining shares, excess application money being transferred to allotment. On 7 October, all allotment money had been received. A first and final call was made on 1 November, and all call money was received by 30 November with the exception of the amount due on 6,000…
3) A company entirely financed with equity has 1,800,000 shares outstanding and decides to issue new shares with subscription rights. The price of shares before the issuance was 42 euro, and the price at which the shares are issued is 38 euro. If the price after the share issuance is going to be 40 euro, determine the number of subscription rights that a shareholder needs to buy one new share in the issuance with subscription rights.
Globex Corporation plc shares are currently trading at $5.00 each. Management wishes to raise capital to expand the business and announces a rights issue. Existing shareholders will be given the right to purchase one share at $3.00 for each three shares currently held. Which of the following statements is correct? The ex rights share price is £2.00 and the value of one right is £3.00 The ex rights share price is £4.17 and the value of one right is £2.00 The ex rights share price is £4.50 and the value of one right is £0.50 The ex rights share price is £5.00 and the value of one right is £2.00 None of the above
In 2007, Xero Ltd. offered a subscription of 15 million shares at an offer price of $1.00 per share with the ability to accept oversubscriptions of up to $3 million. The prospectus detailed the requirement that all applications must be accompanied by payment in full for the total number of shares applied for and stated that application monies will be banked upon receipt into a designated bank account and held on trust pending the allocation of shares. Required: Assuming all 18 million shares were applied for, prepare the journal entry to record the receipt of application monies. Apart from recording a cash inflow, explain whether Xero should also record another asset, a liability, revenue or an expense upon collection of application monies, and explain why.
The authorized capital of the company was OMR 3,000,000 divided into shares of OMR 1 each. The company already had in issue 600,000 shares fully paid up. In the year 2021, the company again issued for subscription by the public 800,000 and share are fully subscribed by the public. How much amount will be the total issued capital of the company?