Question: BARKER S.A. has issued 400.000 common shares and is going to issue an additional 100.000 shares via subscription rights. Each shareholder will receive a subscription

BARKER S.A. has issued 400.000 common shares and is going to issue an additional 100.000 shares via subscription rights. Each shareholder will receive a subscription right per share. Mr. A has 40.000 common shares.

a) What percentage of a new share can the existing shareholders purchase for every subscription right?

b) How many subscription rights are needed in order to purchase a new share?

c) How many new shares can Mr. A purchase?

d) What is the ownership of Mr. A after he has acquired the new shares?

e) Have the ownership rights of Mr. A varied after he has exercised the new shares? What would have happened if he had not exercised his subscription rights?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The total number of common shares that will be issued after the subscription is 400000 100000 500000 shares Each existing shareholder will receive one subscription right per share they own Therefore ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

The Oil City Company plans to sell an additional 1 million shares of common stock through a rights offering. The company currently has 12 million shares outstanding. Each shareholder will receive one...

Partners have fiduciary obligations to each other. Explain what this means and give examples.

The company president is reviewing the performance and budget of the marketing department with the vice president of marketing. Should that be a one-on-one meeting, or should the CFO be present? Why?...

Use the remainder theorem to decide whether the given number is a solution of the equation. x4x36x + 5x = -10; x = -2

Define the construct chasm. Provide three examples of HR metrics which have large construct chasms and discuss how you might bridge the gap to measure them well.

Discuss the impact, both positive and negative, of termination on the project team members. How might the negative impact be lessened?

Hillside emite bonos por $2,800,000 al 8% a 15 aos con fecha 1 de enero de 2017, que pagan intereses semestralmente el 30 de junio y el 31 de diciembre. Los bonos se emiten a un precio de $2,419,512....

In the figure for Problem 13-35, pinion 2 is to be a right-hand helical gear having a helix angle of 30, a normal pressure angle of 20, 16 teeth, and a normal diametral pitch of 6 teeth/in. A motor...

The following events apply to Gulf Seafood for the Year 1 fiscal year: The company started when it acquired $ 1 8 , 0 0 0 cash by issuing common stock. Purchased a new cooktop that cost $ 1 6 , 9 0 0...

1.The author of the book nation and nationalism? 2.who has coined the word soft power is? 3.Kautilya theory of rajamandala belongs to? 4.Man is a political animal who said? 5.Traditional approach...

Explain the factors influencing wage and salary administration.

Examine various types of executive compensation plans.

1. What is the meaning and definition of banks ?

For a turbine agitated and baffled tank, operating at low Reynold's number ( based on impeller diameter ) , the power number ( Np ) varies with NRe as Np NRe Np NRe Np constant Np 1 / NRe

Refer to the data in QS 10-1. Based on financial considerations alone, should Helix accept this order at the special price? Explain.

Illustrate how the statement of cash flows can be used as a financial planning technique.

Note the following information on two mutually exclusive projects under consideration by Wang Food Markets, Inc. Wang requires a 14 percent rate of return on projects of this nature. a. Compute the...

A firm has sales of $10 million, variable costs of $5 million, EBIT of $2 million, and a degree of combined leverage of 3.0. a. If the firm has no preferred stock, what are its annual interest...

Payments of $3500 will be made at the end of every year for 17 years. Using a nominal rate of 5.25% compounded monthly, calculate the annuitys: a. Present value. b. Future value.

For $30,000, Manny purchased a deferred ordinary annuity from an insurance company that will pay him quarterly payments of $1076.71 for 12 1/2 years. The payments are based upon the purchase amount...

The first quarterly payment of $750 in a five-year annuity will be paid 3 3/4 years from now. Based on a discount rate of 8.25% compounded monthly, what is present value of the payments today?