Calculate total number of ordinary shares, Finance Basics

Calculate total number of ordinary shares

Example

Company XYZ Ltd has sold 10,000 ordinary shares of Shs.30 as partly called up plus 20,000 Shs.45 preference shares, that are convertible. Calculate the total number of ordinary shares after conversion.

Solution

Conversion ratio = 30/45 = 2/3 for every 2 preference shares you get 3 ordinary shares.

(20,000/1)*(3/1) = 30,000 ordinary shares

Conversion price = 45/(3/2)=Shs30

Total = 40,000 ordinary shares after conversion.

Posted Date: 1/29/2013 4:26:32 AM | Location : United States







Related Discussions:- Calculate total number of ordinary shares, Assignment Help, Ask Question on Calculate total number of ordinary shares, Get Answer, Expert's Help, Calculate total number of ordinary shares Discussions

Write discussion on Calculate total number of ordinary shares
Your posts are moderated
Related Questions
1. Each project has RM 10,000, and the cost of capital for each project is 12%. The projects' expected cash flows are as follows: Expected Net Cash Flows YEAR

At the end of the fiscal year ending June 30, 2003, Microsoft reported common equity of $64.9 billion on its balance sheet, with $49.0 billion invested in financial assets (in the

Disadvantage of Leasing an Asset A. It is a pre-conditional finance as on the needs of asset B. In the long term the lease charges might out-weigh the cost of buying own as

What factors would affect company consider in choosing option for capital-raising

Tax Differential Theory Advanced via Lichtenberger and Ramaswamy in 1979.They argued that tax rate on dividends is higher quite than tax rate on capital gains. Thus, a firm th

Matching Approach - Financing Current Assets This approach is further referred to as the hedging approach. Beneath this approach, the firm adopts a financial plan that involve

Example of NPV Method Resolution limited intends to purchase a machine worth Shs.1, 500,000 that will have a residue value Shs.200,000 after 5 years helpful life. The saving

Bob and Jackie came to your bank seeking an FHA mortgage. They want to know how large a mortgage they would be qualified for and what the terms would be. Bob is a pastry chef (

Advantages and Disadvantage of Profitability Index Advantages of profitability index a) Simple to understand and utilize. b) The part of NPV in the venture will show t

Marginal cost of finance This is cost of new finances or additional cost a company has to pay to raise and use additional finance is given by: (Total cost of marginal finan