Montreal based Dollarama Inc sells consumer products

and general merchandise for #3830

Montreal-based Dollarama Inc. sells consumer products and general merchandise for $2 or less
throughout Canada. The statement of shareholders’ equity and company’s balance sheet, and
a portion of Note 11 from its 2009 financial statements are presented in Exhibit 11-12. Exhibit
11-12 also describes some of the changes that the company made to its share structure before
and after it went public in October 2009.In Exhibit 11-12Consolidated Statements of
Shareholders' EquityRequired:a. Describe the changes that the company made to its capital
structure when it went public. Why were these changes necessary before going public?b. Prior
to the company going public, a group of shareholders controlled Dollarama through various
types of shares that were all converted into common shares at the time of the IPO. After the
initial public offering (IPO), what percentage of the votes (including the shares issued in the
stock split) does that controlling group still own? What percentage of the common stock share
capital did the group contribute??c. Calculate the total debt to equity ratio for 2009 and 2010
(total liabilities divided by total shareholders’ equity). Comment on the change in the ratio. If
you were a creditor of Dollarama, how would you feel about the change?d. How much money
did Dollarama raise in its IPO? By how much did its share capital increase compared to 2009?
Explain the difference, if any.e. Is it possible to compare the ROE for Dollarama for 2009 and
2010? Why or why not?View Solution:
Montreal based Dollarama Inc sells consumer products and general merchandise for

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