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Question Six: (15 marks) The following is a summarized balance sheet of Nithsdale Ltd. Cash Other assets less liabilities Ordinary shares (400,000 of 25

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Question Six: (15 marks) The following is a summarized balance sheet of Nithsdale Ltd. Cash Other assets less liabilities Ordinary shares (400,000 of 25 cents each) Share premium $000 S 20 320 340 100 40 Reserves of retained profit 200 340 The company is considering three possible changes to its capital structure: (a) issue for cash 50,000 additional ordinary shares at $1 per share, fully paid (5 marks) (b) make a 1 for 4 capitalisation issue of ordinary shares (5 marks) (c) make a 1 for 5 rights issue at $3 per share (5 marks) Show separately the impact of each change on the balance sheet of the company.

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