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On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new
On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par Subscribed ordinary shares Share premium Retained earnings Treasury shares, 80.000 shares P4,000,000 1,000,000 600,000 200,000 1,750,000 What is the effect on the stockholders' equity if all but 60,000 share rights were exercised? 2,100.000 increase O 1.300.000 increase no change 1.800.000 increase
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