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Dear John,
Drumlin co has 5m of $0,5 nominal value ordinary shares in issue. It recently announced a 1 fro 4 rights issue at $6 per share. Its share price on the announcement of the rights issue was $8 per share.
Solution: $0,40
value of right=((5mx$8+1.25mx$6)/6,25m-$6)/4 shares= 0,40 per shareI am lost with the end of the solution -$6/4shares???
Could you please help.Thank you.
Best regards,
KatalinI got it John, no need to reply 🙂
I had to break it down a bit then it was clear…
I got it until 7,6 last night then i got stuck…
Then this morning i had a fresh brain so it was easy to see that 7,6 was total share price so then the ordinary share price had to be deducted from the 7.6 then divided by 4 to get the right issued share price.
Happy days 🙂Have a nice weekend.
Kind regards,
Katalin
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