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A. The capital structure of MAID Company is as follows: Long-term debt RM 400 million Common stock, RM1 par RM 50 million RM 250 million
A. The capital structure of MAID Company is as follows: Long-term debt RM 400 million Common stock, RM1 par RM 50 million RM 250 million Contributed capital in excess of par Retained earnings Total RM 600 million RM 1,300 million The company has decided to raise additional capital by selling RM100 million of 8% debentures with warrants attached. Each RM1000 debenture will have 40 warrants attached, and each warrant will entitle the holder to purchase one share of common stock at RM20. Assume that no other changes in the capital structure occur between now and the time the warrants are exercised. Determine how much total capital the company will raise as a result of the issuance of debentures with warrants attached (after exercise of the warrants). (10 marks) A. The capital structure of MAID Company is as follows: Long-term debt RM 400 million Common stock, RM1 par RM 50 million RM 250 million Contributed capital in excess of par Retained earnings Total RM 600 million RM 1,300 million The company has decided to raise additional capital by selling RM100 million of 8% debentures with warrants attached. Each RM1000 debenture will have 40 warrants attached, and each warrant will entitle the holder to purchase one share of common stock at RM20. Assume that no other changes in the capital structure occur between now and the time the warrants are exercised. Determine how much total capital the company will raise as a result of the issuance of debentures with warrants attached (after exercise of the warrants). (10 marks)
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