Saturday, January 21, 2017
The shares are cumulative and pay an annual dividend 0f 6% on 30 June every year 2. The shares are redeemable
A company will issue 200k perference shares (10 years, 50 per share) on 1 July 2015 (as equity) 1.The shares are cumulative and pay an annual dividend 0f 6% on 30 June every year 2. The shares are redeemable. At the end of 10 year, preference shares can choose to receive a cash payment of $50 per share or receive ordinary shares. The number of ordinary shares =(($50/market price per share on 1 july 2025+1 share)). The market price of the ordinanry share on 1 july 2015 is $10. 3. On 1 july 2015, the company could issue debt securities (10 years at 7% interest per annum, returning to debt holders at the end of year 10. Questions; can this propasal raise more working capital or decrease debet to asset ratio
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