Sunlight Solar Ltd decides to issue six right shares for every eleven shares held. The right shares are priced at ₹561 each and the present cum-right price of the company's share traded in the NSE/BSE is ₹785. Average Fl

Value of each share after rights issue = Total Holding value (including Right Shares) /Total Number of Holding (including Right Shares) Value of Right = Market Value of Share - Value of share after rights issue A Market value of the 11 existing holdings @ ₹785/- per share) ₹8,635/- B Issue Price of 6 new holdings @ ₹561 ₹3,366/- Total holding 17 shares A+B Value of holdings ₹12,001/- Value of each share (₹12,001/17 shares) ₹705.94/- Fair Value of the Right (₹785-705.94) = ₹79.06 Value of Right: ₹79.06 Alternate Answer 5(a) Value of Right = [Number of Rights Shares/ Total Shares (Old + New Holdings)] x [(Market Value - Right issue price)] 6/17 x (₹785 - ₹561) 6/17 x 224 = ₹79.06 Value of Right: ₹79.06