Carola Limited is issuing 250,000 ordinary shares with a par value of 25 pence each at a premium of 150 pence per share together with 150,000 preference shares with a par value of 50 pence. How much cash will Carola Limited raise from this share issue?

Question

Quizplus · Accepted Answer

Carola Limited will raise cash from ordinary shares as follows: 250,000 shares * (25 pence par value + 150 pence premium) = £437,500. From preference shares: 150,000 shares * 50 pence = £75,000. Total cash raised = £437,500 + £75,000 = £512,500.

Carola Limited Is Issuing 250,000 Ordinary Shares with a Par