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Hi there,
I am studying accounting and finance as a degree and my paper on International Business Finance is based on the ACCA FM paper.
There is a multiple choice question which says ‘ Company ATR has anounced a 1 for 5 rights issue at a subcription price of £2.30. The current cum-rights price of the shares is £3.35. What is the ex-dividend market value?
The answer for this is £3.18.
I would really appreicate any help you can give as, I do not know how to work this out.
Thank you,
Gerda
You should watch my free lectures on Chapter 11 of our free lecture notes – I explain how to do this in details, with examples. You cannot expect me to type out all of my free lectures here 🙂
The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
( ((5 x 3.35) + 2.30)/6 = 3.18 )
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