Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Practical case 3 A company has 40,000,000 shares. The nominal value of the share is EUR 10 and its market price is EUR 27. The

image text in transcribed

Practical case 3 A company has 40,000,000 shares. The nominal value of the share is EUR 10 and its market price is EUR 27. The company proposes a capital increase of 10.000,000 new shares at an issue price of EUR 24.5 per share. It is requested: 1. Calculate the value of the subscription right. 2. How much will a shareholder who wishes to subscribe to 3,000 of the new shares and who was not previously a shareholder pay? 3. What will the cash flows be for a shareholder holding 200,000 shares who does not wish to participate in the capital increase? 4. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 20,000? 5. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 30.000? 6. What will the market share price be after the capital increase? Note: for the purpose of the calculations assume that the only change for the company that occurs is the capital increase. Practical case 3 A company has 40,000,000 shares. The nominal value of the share is EUR 10 and its market price is EUR 27. The company proposes a capital increase of 10.000,000 new shares at an issue price of EUR 24.5 per share. It is requested: 1. Calculate the value of the subscription right. 2. How much will a shareholder who wishes to subscribe to 3,000 of the new shares and who was not previously a shareholder pay? 3. What will the cash flows be for a shareholder holding 200,000 shares who does not wish to participate in the capital increase? 4. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 20,000? 5. What will the cash flows be for a shareholder who subscribes for 20,000 of the new shares and previously held 30.000? 6. What will the market share price be after the capital increase? Note: for the purpose of the calculations assume that the only change for the company that occurs is the capital increase

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Guide To Finance Theory And Application Portfolio Mathematics

Authors: Professional Risk Managers' International Association (PRMIA)

1st Edition

0071731814

More Books

Students also viewed these Finance questions

Question

11. Understand the major causes of project failure

Answered: 1 week ago