A company has 40,000,000 shares. The nominal value of the share is EUR 10 and its...

   

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A company has 40,000,000 shares. The nominal value of the share is EUR 10 and its market price is EUR 27. The company proposes a capital increase of 10.000,000 new shares at an issue price of EUR 24.5 per share. It is requested: 1. Calculate the value of the subscription right. 2. How much will a shareholder who wishes to subscribe to 3,000 of the new shares and who was not previously a shareholder pay? 3. What will the cash flows be for a shareholder holding 200,000 shares who does not wish to participate in the capital increase? 4. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 20,000? 5. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 30.000? 6. What will the market share price be after the capital increase? Note: for the purpose of the calculations assume that the only change for the company that occurs is the capital increase. A company has 40,000,000 shares. The nominal value of the share is EUR 10 and its market price is EUR 27. The company proposes a capital increase of 10.000,000 new shares at an issue price of EUR 24.5 per share. It is requested: 1. Calculate the value of the subscription right. 2. How much will a shareholder who wishes to subscribe to 3,000 of the new shares and who was not previously a shareholder pay? 3. What will the cash flows be for a shareholder holding 200,000 shares who does not wish to participate in the capital increase? 4. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 20,000? 5. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 30.000? 6. What will the market share price be after the capital increase? Note: for the purpose of the calculations assume that the only change for the company that occurs is the capital increase.

Answer rating: 100% (QA)

To calculate the value of the subscription right we need to subtract the difference between the mark... View the full answer