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Q number 6.6

S

SAYZ1

Member
Hello,

I dont understand the solution for this question..

The text book answer writes:

Nominal value of new shares = £150m
Cash raised = £900m

I dont understand where this £900m came from.

My answer comes to be £90m.. Here are the steps:
Mkt capitalization = P x no. of shares = .15 x 600
i.e £90m
the balance sheet proceeds will then change entirely from the solution?

Can somebody please tell me where I am wrong?
 
The offer price is 150p, so working in pounds you should multiply by 1.5 instead of .15

I just made the exact same mistake when I tried to work this out :p
 
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