dfs equity section

meibaker

hi, please someone explain the equity section for me please,
thank you!
equity.................................08......................07
share capital...................8,000,000...............6,000,000
share premium................4,200,000................1,200,000

suggested answers:
The share capital and the share premium have both increased due to the issue of 2,000,000 new shares. These were issued at £2.50 per share and therefore increased share capital by £2,000,000 (2,000,000 at £1 par value per share) and share premium by £3,000,000 (2,000,000 at £1.50 premium per share).

i still not sure how the issue of 2,000,000 new shares comes from?
please help

jewels.p

meibaker wrote: »

hi, please someone explain the equity section for me please,
thank you!
equity.................................08......................07
share capital...................8,000,000...............6,000,000
share premium................4,200,000................1,200,000

suggested answers:
The share capital and the share premium have both increased due to the issue of 2,000,000 new shares. These were issued at £2.50 per share and therefore increased share capital by £2,000,000 (2,000,000 at £1 par value per share) and share premium by £3,000,000 (2,000,000 at £1.50 premium per share).

i still not sure how the issue of 2,000,000 new shares comes from?
please help

I am not quite sure what you mean meibaker? Does it tell you that the shares were issued?

Steve Collings

The question will usually tell you that there has been a share issue. However, in the answer quotation in meibaker's post, you can see there has been an issue of shares because the share capital itself has gone up by 2m shares.

Regards
Steve

meibaker

Steve Collings wrote: »

The question will usually tell you that there has been a share issue. However, in the answer quotation in meibaker's post, you can see there has been an issue of shares because the share capital itself has gone up by 2m shares.

Regards
Steve

hi jewels:
this is a question from the past exam, it asks you to explain the equity.

can i ask something very quitely please steve.
share capital are all value at £1 per share?am i right? that's why it went up to 2m shares!

jewels.p

Sorry for answering for Steve but yes thats right. You can calculate how much the share and share premium are by looking at the two years.

meibaker

thank you jewels! i am sure steve doesn't mind, he might employs you as his assistant! ;-)

jewels.p

meibaker wrote: »

thank you jewels! i am sure steve doesn't mind, he might employs you as his assistant! ;-)

I doubt that! :laugh: