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Bolton Ltd currently has 200,000 issued shares trading at $3.50 per share and has announced a rights issue at a subscription rate of $1.30 per share. If the company intends to raise $ 26,000, how many shares must be issued? a. 7,492 b. 20,000 c. 153,846 d. 26,000

Bolton Ltd currently has 200,000 issued shares trading at $3.50 per share and has announced a rights issue at a subscription rate of $1.30 per share. If the company intends to raise $ 26,000, how many shares must be issued? a. 7,492 b. 20,000 c. 153,846 d. 26,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bolton Ltd currently has 200,000 issued shares trading at $3.50 per share and has announced a rights issue at a subscription rate of $1.30 per share. If the company intends to raise $ 26,000, how many shares must be issued? a. 7,492 b. 20,000 c. 153,846 O d. 26,000
Transcribed Image Text:Bolton Ltd currently has 200,000 issued shares trading at $3.50 per share and has announced a rights issue at a subscription rate of $1.30 per share. If the company intends to raise $ 26,000, how many shares must be issued? a. 7,492 b. 20,000 c. 153,846 O d. 26,000
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Step 1

Right shares are issued to the existing shareholders on the basis of the proportion of holding. The right share is also known as a right issue which is issued at a discounted price.

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