March 2025 ACCA Exam Results

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

Dec 09 Exam Q3b

This topic has 2 replies, 2 voices, and was last updated 14 years ago by bridmw.

Viewing 3 posts - 1 through 3 (of 3 total)

Author
Posts
December 8, 2010 at 12:38 am #46750
karenlaing
Member
- Topics: 40
- Replies: 36
I cannot see where the extra profit etc has come from – can someone explain?, and I thought when there was a rights issue it did not change shareholders wealth…..
This is the worst past exam I have ever seen …..
December 8, 2010 at 12:53 am #73324
karenlaing
Member
- Topics: 40
- Replies: 36
I can see where the profit came from now – but what about shareholders wealth ?
December 8, 2010 at 2:22 am #73325
bridmw
Member
- Topics: 5
- Replies: 132
The rights issue by itself doesn’t change the shareholders wealth. The increased profits due to the return on the project being higher than the cost of capital are what increases the wealth of the shareholder. The PER is used to give an estimate of what that change might be.
Author
Posts

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic.