Sources of Finance: Equity (part b)

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  1. Avatar of balcune1 balcune1 says:
    November 1, 2012 at 8:22 pm

    …if rights issue is for existing s/holders only ,- how can Vita buy the letter-rights? or how can she buy the rights at 4.60 directly on the market exch … referring to point made that in real life the value of rights probably be lower at 1.58 rather than 1.60 as per calculation
    I am very puzzled by this, could you please clarify, the rest is clear as water , thank you , really glad I found this website!

    • Avatar of johnmoffat johnmoffat says:
      November 2, 2012 at 6:13 am

      @balcune1, Although the offer of new shares is made to existing shareholders, the shareholders can sell the letter (the rights) to other people.

      Vita can buy the shares directly on the stock exchange at the ex-rights price and so there would be no point in real life for her to buy the rights at 1.60 and then buy the shares by paying 3.00 to the company – it would be less hassle for her simply to buy the share on the stock exchange for the same total cost!

      To encourage people to buy the rights, they would be priced slightly lower.

  2. Avatar of quflemadina quflemadina says:
    May 7, 2012 at 1:23 pm

    perfect lecture easy to understand thanks OT

  3. Avatar of usmannajam usmannajam says:
    March 6, 2012 at 5:07 pm

    it is a very good lecture indeed

  4. Avatar of mahongo mahongo says:
    February 20, 2012 at 4:27 pm

    Perfect lecture indeed and thank so very much!!! Is it possible to check the duration of this and other lectures?

  5. Avatar of luckymuuka luckymuuka says:
    November 9, 2011 at 9:59 am

    Best for sure

  6. Avatar of tabibatlokwa tabibatlokwa says:
    October 31, 2011 at 11:52 am

    simply the best lectures….thank you so much!!!

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