Laos Company wants to raise its working capital. After analysis of the available options, the Company decides to issue 6,000 shares of P30 par preference shares with detachable warrants. The package of the shares and warrants sells for P120. The warrants enable the holder to purchase 6,000 shares of P10 par ordinary shares at P40 per share. Immediately following the issuance of the shares, the share warrants are selling at P10 per share. The market value of the preference shares without warrant is P90. What amount should be assigned to the share warrants issued?

Laos Company wants to raise its working capital. After analysis of the available options, the Company decides to issue 6,000 shares of P30 par preference shares with detachable warrants. The package of the shares and warrants sells for P120. The warrants enable the holder to purchase 6,000 shares of P10 par ordinary shares at P40 per share. Immediately following the issuance of the shares, the share warrants are selling at P10 per share. The market value of the preference shares without warrant is P90. What amount should be assigned to the share warrants issued?

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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