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Sir in Bar co part (b), examiner has mentioned in answer that “This share price is less than the theoretical ex rights price per share ($7·20) and so the effect of using the rights issue funds to redeem the bonds is to decrease shareholder wealth. From a shareholder perspective, therefore, this use of the funds cannot be recommended”
If instead of this above whole sentence I write that “Since wealth of shareholders has decreased as they have experienced capital loss of $0.12 per share ($7.2 – $7.08), hence using the cash raised by rights issue funds to buyback bonds is not acceptable to shareholders”
Would it be right to use Capital Loss word? And would the above statement be correct?
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