The following is a summarized balance sheet of Nithsdale Ltd. The company is considering three possible changes
Question:
The following is a summarized balance sheet of Nithsdale Ltd.
The company is considering three possible changes to its capital structure:
(a) Issue for cash 50,000 additional ordinary shares at £1 per share, fully paid; or
(b) Make a 1 for 4 capitalization issue of ordinary shares; or
(c) Make a 1 for 5 rights issue at £3 per share.
Show separately the impact of each change on the balance sheet of the company.
Transcribed Image Text:
£000s Cash 20 Other assets less liabilities 320 340 Ordinary shares (400,000 of 25 pence each) Share premium Reserves of retained profit 100 40 200 340
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