April 2008 Q9

Discussion in 'CB1' started by AKS01, Jul 14, 2019 at 1:48 PM.

  1. AKS01

    AKS01 Member

    I am trying to calculate the theoretical ex-rights price but cannot get to any of the answers from the multiple choice.
    Would it possible to break down the calculation please?
  2. Lynn Birchall

    Lynn Birchall ActEd Tutor Staff Member


    This is a scrip issue so, unlike a rights issue, doesn't raise any new capital for the company.
    The number of shares in issue will increase from 2m (with a price of £4.00) to 2.5m with a price of :
    (2m x £4.00) / 2.5m = £3.20

    Hope this sorts it

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