Gamma s.p.a. is a joint-stock company and has a share capital of EUR 120K. Mark and Emma, who respectively have an interest in Gamma of 25% and 30%, vote in favor to the directors proposal to increase the share capital, by means of new contributions, to EUR 240K. Fred, who owns a 45% interest in the company, is outvoted.

The newly issued shares are offered to all shareholders at a subscription price equal to their nominal value (no share premium). While Mark and Emma choose to exercise their pre-emption rights, Fred does not and the relevant shares are subscribed on a pro-rata basis by Mark and Emma.

Pick the correct answer.

a. The economic value of Mark's and Emma's interests in Gamma is reduced

b. Fred's stake in Gamma s.p.a. is reduced to 22.5% as a result of the transaction

c. Fred does not suffer any economic prejudice as a result of his choice not to exercise his pre-emption right

d. Mark and Emma gets diluted as a result of the transaction

Beta s.p.a. has issued:

- 2000 Special Voting Shares A allowing the relevant owners to cast 3 votes per share at the shareholder’s General Meeting;

- 2000 Ordinary Shares, each granting one vote;

- 4000 non-voting shares.

How many Special Voting Shares A are needed at least to exercise the majority control over the company?

a.1334 Special Voting Shares

b.1001 Special Voting Shares A

c.666 Special Voting Shares A

d.2000, plus at least one ordinary share

Answer rating: 100% (QA)

For the first question regarding Gamma spa and the increase in share capital b Freds stake in Gamma ... View the full answer