Mgt401 GDB No. 2 solution
Tuesday, June 14, 2011 Posted In MGT Edit ThisQ: Wateen Telecom (Pvt.) Ltd. is a fully owned subsidiary of Abu Dhabi Group. It is recognized as one of the fastest growing ISPs (Internet Service Providers) in Pakistan from last two to three years. It has authorized capital of 25 million shares, while issued capital of 10 million shares at par value of Rs. 10 each with the same market price in year 2010. As one of the fastest growing ISPs, it needs large amount of finance to fund its telecommunication infrastructure in upcoming years. At starting of year 2011, management and existing shareholders mutually decided in AGM (Annual General Meeting) to raise all finance through equity financing due to high cost of borrowing in Pakistan in order to meet its financial needs in telecommunication infrastructure development. It is also decided in the meeting that company will gather the finance by issuing further 10 million new shares at par value. It will issue 6 million shares to its current shareholders while remaining 4 million shares will be issued to general public at large in the open market.
You are required to mention what specific term for the shares will be used when these will be issued
1. Current Shareholders:_____________
2. General Public:__________________
You are required to mention what specific term for the shares will be used when these will be issued
1. Current Shareholders:_____________
2. General Public:__________________
................ Solution.................
Current Shareholders:Right Issue
General Public:Further Issue
Reference: (Lecture # 23)
General Public:Further Issue
Reference: (Lecture # 23)
.............................
1. Primitive/current/right issue offer
2. An 'Offering' or 'Offer'
2. An 'Offering' or 'Offer'
