Moon Corp. Has P10million, Authorized capital stock, P10 par value. 60% were issued stock and 10% of those issued were reacquired back by the company as treasury shares. June owns 1/3 of the outstanding capital stock, July holds an equivalent of 50% of what June holds and August owns an equivalent to 75% of what July held, the balance to the other stockholders. The board of Moon Corp. Declared an additional issuance of stock for subscription. This will allow all stockholders to exercise their rights: for every 5 rights, they can subscribed for 2 shares at a subscription price of P12 per share. Required: How many shares will be offered for subscription? How much cash maybe generated from this subscription? If June, July and August will exercise their rights, what is the minimum number of shares each can subscribed? How much cash maybe generated from each subscribers? Assuming that June, July and August will not exercise their pre-emptive rights,and other subscribers will acquired their subscriptions, what is the percentage holdings of the existing stockholders? Assuming only August will not subscribed and her subscriptions will be acquired by June and July, what is the % holdings of the existing shareholders after the subscriptions?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...

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Moon Corp. Has P10million, Authorized capital stock, P10 par value. 60% were issued stock and 10% of those issued were reacquired back by the company as treasury shares.

June owns 1/3 of the outstanding capital stock, July holds an equivalent of 50% of what June holds and August owns an equivalent to 75% of what July held, the balance to the other stockholders.

The board of Moon Corp. Declared an additional issuance of stock for subscription. This will allow all stockholders to exercise their rights: for every 5 rights, they can subscribed for 2 shares at a subscription price of P12 per share.

Required:

How many shares will be offered for subscription? How much cash maybe generated from this subscription?
If June, July and August will exercise their rights, what is the minimum number of shares each can subscribed? How much cash maybe generated from each subscribers?
Assuming that June, July and August will not exercise their pre-emptive rights,and other subscribers will acquired their subscriptions, what is the percentage holdings of the existing stockholders?
Assuming only August will not subscribed and her subscriptions will be acquired by June and July, what is the % holdings of the existing shareholders after the subscriptions?

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