• Profile photo of John Moffat says

      I assume you are referring to the part (iii) that I added to the example in the notes.

      Ilze currently has 2,000 shares. There is a 1 for 4 rights issue, and therefore she will be entitled to buy 1/4 x 2000 = 500 new shares.

      (I assume that you have watched the main lectures (and not just the revision lectures), If you haven’t then I think you will find them useful.)

    • Profile photo of John Moffat says

      We either take up the rights (and pay $3) or we sell the rights (and receive $1.20 for them).

      We do not do both!If we sell the rights, we will be able to sell them for the difference between the ex-rights price of 4.20 and the price that the person buying the rights from us would have to pay to take them up ($3). So we will be able to sell them for $1.20.

  1. avatar says

    Hi John,

    I need some help in terms of understanding of process of when a company raise fund, investments, i.e. right issue in order to complete an expansion . I am referring to Q1 for Dec 08 here. I find it difficult allocate all the information in the right place in my mind when reading a question like this. Any tips? At work right now hence have not watched this video yet. Many thanks, Jing

    • Profile photo of John Moffat says

      It is difficult for me to help when I am not quite sure what your problem is.
      Best is to watch the lecture, and then to ask if it is not clear.
      (But please ask in the Ask the ACCA Tutor Forum for F9)

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