Cool Ltd Acquired 4 Cool Ltd Paid $6

Multiple Choice

Cool Ltd acquired 4.5 million of the issued shares of Cat Ltd on 1 July 20X0 when the equity of Cat Ltd (at fair value) was as follows:
$\begin{array} { l l } \text { } & \$000s \\\text { Paid up capital (5 million shares) } & 4000 \\\text { Retained profits } & 1000 \\\text { General reserve } & 1000\end{array}$
Cool Ltd paid $6.5 million for this acquisition. On 1 July 20X1 Cat Ltd issued bonus shares in lieu of paying a dividend. The terms of the issue were 1 bonus share for every 4 shares held.
-How many bonus shares did Cool Ltd receive?

A) 1.125 million
B) 1.25 million
C) 1.5 million
D) 27 million