thats for my friend must be different from each otherThis is NOT a report but it is expected that...

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thats for my friend must be different from each otherThis is NOT a report but it is expected that your submission will be in an appropriate
format. There is no word limit applied but you should ensure that each question is
appropriately answered. Where references are used, ensure they are recognised
(refer to student handbook or your lecturer if unsure)
	
Document Preview: ASSIGNMENTPart A: (8 marks)Antonius Ltd is considering raising equity capital as they are looking to expand theirbusiness. They estimate they will need around $80 million for the expansion and feelthat an appropriate price per share (based on advice) would be $8.00.You are to advise them how best to go about it, what type of shares they couldconsider, advantages and disadvantages of each and how best to ensure they obtainthe full $80 million. You need to consider that it might be difficult to attract investorsto part with the full $8.00 in one payment (minimum is 1,000 shares) given thecurrent economic climate.Part B (8 marks)Antonuis Ltd directors have decided to issue a prospectus on 25th April, 2011 for 10million shares at $8.00It closes on 28th May and requires payment of $2.60 per share on application.Directors allocate shares on 10th June and upon allotment, a further payment of$2.60 per share is required (assume paid in fourteen days from allocation).First and final call is on 17th August when the balance is to be paid, amount to bepaid within 14 days (assume all received and recognised on that date).Prepare all journal entries assuming all application monies recognised on 28th May(including ALL notations and dates). There was an oversubscription for another300,000 shares and the directors decided to issue share son a “first-come, firstserved”basisPart C (4 marks)What is the difference between an “Associate” and a “Subsidiary”? Give an examplein your answer. And what is Goodwill and when is that applied?

David · Accepted Answer

ASSIGNMENT 
Part A: (8 marks) 
Antonius Ltd is considering raising equity capital as they are looking to expand their 
business. They estimate they will need around $80 million for the expansion and feel 
that an appropriate price per share (based on advice) would be $8.00. You are to advise them 
how best to go about it, what type of shares they could consider, advantages and 
disadvantages of each and how best to ensure they obtain the full $80 million. You need to 
consider that it might be difficult to attract investors to part with the full $8.00 in one 
payment (minimum is 1,000 shares) given the current economic climate.
Answer: We are under the assumption that the company is doing better in its existing  
business and wants raise funds to expand its business. We also assume that the fundamentals 
of the company are very strong and it is headed by experienced and professional people. In 
order to build the confidence of the  investors , the company should go for rating by one of 
the  credit rating agencies. Then the company should recruit an investment banker for this 
purpose. The investment banker  would try to understand the position of the market with the 
help of marketing survey and accordingly the investment banker can decide , what kind of 
capital the company should go for. Let us assume, the company prefers to issue common 
stocks. If the investment banker feels that, given the present conditions, the estimated capital 
of $80 Million,

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