Calculate value of 'rights' from the following information: Number of rights shares offered: 2,500 Number of shares held: 1,000 Ex-rights price: ₹18 Rights offer price: ₹15 Face value of a share: ₹10
CS Executive · Capital Markets & Securities Laws · PYQS · June 2015
Calculate value of 'rights' from the following information: Number of rights shares offered: 2,500 Number of shares held: 1,000 Ex-rights price: ₹18 Rights offer price: ₹15 Face value of a share: ₹10
Answer & Explanation:
Value of right, = (P ex - P of ) * (n / m) Where n = No. of rights shares offered m = No. of shares held P ex = Ex-rights Price P of = Rights Offer Price = (2500 / 1000) * (18 - 15) = 2.5 * 3 = ₹7.5
Topics: Corporate Finance