could someone take their time and explain me how they got numbers in suggested solutions

where 2,5mil of ordinary shares came from

the ves as at 31 August 200x. Dr: Rerained Courses with event of the debits must agree with the Example 7.2 Mera ple has the following share capital and reserve 375,000 225,000 200,000 800,000 D y shares: 1.5m shares of 25p each fully paid Share premium Retained profil Total equity under UK law is to 'pay irectors therefore decide to ares at par in the ratio of two One of the few uses for share premium account under for the issue of fully paid bonus shares. The directors use the reserves to issue fully paid bonus shares at shares for every three currently held. Required ries for owners' equity after the bonus a. Show the revised account entries for owners' issue. b. Assuming that the market value of each share has tende around 50p ex div (i.e. excluding the value in the new future) and the total annual dividend paid has re ch share has tended to stay e excluding the value of any dividend expected dividend paid has remained at many years, what would you expect the market price of each share to be after the bonus issue? Suggested solution 625,000 2,500,000 ordinary shares of 25p each fully paid Share premium Retained profit (200,000 - 25,000) 175,000 800,000 e overall owners' equity has not changed: 1.500,000 X 2/3 = 1,000,000 new shares were issued at 25p each, a tot ued at 25p each, a total cost of 250.000. The directors first use up all the share premium account (225.000) to fund this, then take the last 25,000 out of retained profits. Before the bonus issue, the market value of the company is 1.500.000 shares x 50p = 750,000. If there is no change in the market's expectations of future prospects. including the total amount of dividends to be paid out, this total market value should not change after the bonus issue. However, now there are 2,500,000 shares in issue, so each individual share must have a market value of 750,000/2,500,000 = 30p