Duck Limited wishes to raise £1,200,000 in cash. How many shares will the company have to issue to raise £1,200,000 if the shares have a par value of 75 pence and the shares are issued at a premium of 125 pence?

Question

Quizplus · Accepted Answer

The shares are issued at a total price of 200 pence (75 pence par value + 125 pence premium). To raise £1,200,000, divide £1,200,000 by £2 (200 pence), resulting in 600,000 shares.

Duck Limited Wishes to Raise £1,200,000 in Cash