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The following balances were taken from the books of BZN Ltd on 31 Dec...
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The following balances were taken from the books of BZN Ltd on 31 December 2024, the financial year end of the company:
|
R
|
Issued Ordinary share capital (R1 shares)
|
850 000
|
90 000 10% non-cumulative preference shares
|
250 000
|
60 000 12% cumulative preference shares
|
150 000
|
Retained earnings
|
650 000
|
Occasionally companies build up large reserves from their accumulated profits. To enable shareholders to derive some tangible benefits from these reserves, the company may decide to capitalise these reserves and distribute them among the shareholders in the form of capitalisation shares.
Included in the capital structure above are the following transaction that took place during the current financial year that ended on 31 December 2024:
· A Capitalisation issue that the directors made on 1 December 2024 of one ordinary share for every four shares held at R1,00 per share;
The directors of the company also approved the following transactions during the year:
· The issue of 5 000 12% cumulative preferences shares at R5 per share on 1 October 2024.
· Dividends on ordinary shares was declared at 10c per share on 31 December 2024. No dividends were declared or paid during the previous financial year.
Required:
What will the rand value be of the
capitalization share issue, issued to shareholders at 1 December 2024?