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Accounting Paper 1, November 2024, question 3.5.3

Accounting P1 · Companies share capital and equity
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Rights issue and shareholding: Shares in issue on 1 March 2023: 2 000 000 Shares owned by Grant Waters on 1 March 2023: 900 000 On 31 October 2023 every shareholder was offered 1 new share for every 4 shares already owned, at a reduced price. All shareholders accepted the offer. The company raised R1 750 000 in total from this rights issue.
3.5.34 marks
Calculate the total amount that Grant Waters paid for the shares he received through the rights issue. No shares were repurchased during the financial year.

NSCBased on Nov 2024 · Paper 1 · Q3.5.3

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What examiners found

The rights issue ratio was not applied correctly, so the number of extra shares was wrong.

In our words. Source: Department of Basic Education, NSC 2024 Diagnostic Report, Part 1 (Book 1), Q3.5.

Updated