Redeemable Preference Shares

Definition:
Redeemable preference shares are a type of preference shares that can be redeemed by the company at a future date or on a specified event. These shares have a fixed maturity date and are issued with the promise to pay back the initial investment to the shareholders.

Redeemable Preference Shares of Rs. 50,000 redeemable at par

Explanation:
In this scenario, the company has issued redeemable preference shares with a total value of Rs. 50,000. These shares are redeemable at par, which means that the company will repay the shareholders the full face value of the shares when they are redeemed.

New Issue of Shares of Rs. 30,000 at a Discount of 10%

Explanation:
The company has decided to issue new shares worth Rs. 30,000 at a discount of 10%. This means that the shares will be issued at a price that is 10% lower than the face value of the shares.

Calculation of Discounted Price of the New Shares:
To calculate the discounted price of the new shares, we need to subtract the discount amount from the face value of the shares.

Discount amount = 10% of Rs. 30,000 = Rs. 3,000

Discounted price of the new shares = Face value - Discount amount
= Rs. 30,000 - Rs. 3,000
= Rs. 27,000

Therefore, the new shares will be issued at a price of Rs. 27,000.

Analysis:
The company has issued new shares worth Rs. 30,000 at a discount of 10%, resulting in a discounted price of Rs. 27,000. This means that the company will receive a total of Rs. 27,000 from the issuance of these new shares.

Impact on Shareholders:
The issuance of new shares at a discount can impact the existing shareholders in the following ways:

1. Dilution of Ownership: The issuance of new shares increases the total number of shares in circulation, which can dilute the ownership stake of existing shareholders.

2. Reduction in Earnings per Share (EPS): The increased number of shares can lead to a decrease in the company's earnings per share, as the earnings will be distributed among a larger number of shares.

3. Potential for Capital Appreciation: If the company performs well and the value of its shares increases over time, the new shareholders who purchased the discounted shares have the potential to benefit from capital appreciation.

4. Decrease in Dividend per Share: With the increased number of shares, the dividend per share may decrease as the company will need to distribute its profits among a larger number of shareholders.

Conclusion:
In conclusion, the company has issued redeemable preference shares worth Rs. 50,000 redeemable at par. Additionally, the company has issued new shares worth Rs. 30,000 at a discount of 10%. This issuance of discounted shares can have various impacts on the existing shareholders, including dilution of ownership, potential capital appreciation, and a decrease in earnings per share and dividend per share.