Montreal-based Dollarama Inc. sells consumer products and general merchandise for $2 or less throughout Canada. The statement of shareholders€™ equity and company€™s balance sheet, and a portion of Note 11 from its 2009 financial statements are presented in Exhibit 11-12. Exhibit 11-12 also describes some of the changes that the company made to its share structure before and after it went public in October 2009.
In Exhibit 11-12
Consolidated Statements of Shareholders' Equity

Required:
a. Describe the changes that the company made to its capital structure when it went public. Why were these changes necessary before going public?
b. Prior to the company going public, a group of shareholders controlled Dollarama through various types of shares that were all converted into common shares at the time of the IPO. After the initial public offering (IPO), what percentage of the votes (including the shares issued in the stock split) does that controlling group still own? What percentage of the common stock share capital did the group contribute?€ƒ
c. Calculate the total debt to equity ratio for 2009 and 2010 (total liabilities divided by total shareholders€™ equity). Comment on the change in the ratio. If you were a creditor of Dollarama, how would you feel about the change?
d. How much money did Dollarama raise in its IPO? By how much did its share capital increase compared to 2009? Explain the difference, if any.
e. Is it possible to compare the ROE for Dollarama for 2009 and 2010? Why or why not?

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Accumulated other Capital Contributed Retained comprehensive Shareholders equity $ expressed in thousands of Canadian dollars earnings S 35,304 10,071 31,526 (15,504) stock $surplus $ income llosslS Balance February 3, 2008 (4,993) 71,908 Net loss for the year Other comprehensive income Unrealized gain on derivative financial instruments, net of (15,504) reclassification adjustments and income taxes of $21,435 Total comprehensive income Stock-based compensation (note 12) 45,550 45,550 30,046 283 40,557102,237 -72,863 283 Balance February 1, 2009 35,3040,354 16,022 -72,863 Net earnings for the year Other comprehensive income Unrealized loss on derivative financial instruments, net of reclassification adjustments and income taxes of $22,465 Total comprehensive income Stock-based compensation inote 12) Issuance of common shares, net of issuance expenses of (50,648) 50,648) 22,215 7,118 -7,118 $27,775 and related income taxes of $6,455 (note 1) 278,680 204,446 518,430 7,472 88,885 278,680 204,446 10,091 614,696 Conversion of amounts due to shareholders into common shares Inote 11) Balance January 31, 2010