December 2007 question 3 / bpp q 68 echo beach company

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December 1, 2015 at 6:28 pm #286812
farhana001
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Can we calculate TERP in this way ((10,000,000*$2.30)+(10,000,000*1/4*1.84))/10,000,000*4/1

However, my answer does not match with the examiners
Can you explain me the calculation please
December 2, 2015 at 7:31 am #286881
John Moffat
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You can (although I don’t know why you do not do it the way that is in our lectures!).

However, you need to divide by the total number of shares in issue after the rights issue, which is certainly not 10M x 4/1 !! After the rights issue there are 12.5M shares in issue.

(It seems that you must be using an old Revision Kit. Echo is no longer question 68 and BPP have now removed the part about the rights issue in order to make it a 10 mark question given the new exam format. I am worried for you that your Revision Kit may not contain MCQ’s and MCQ’s will be 40% of the marks in the exam.)
December 2, 2015 at 4:13 pm #287017
farhana001
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I am using bpp up to June 2015 kit.
December 2, 2015 at 5:37 pm #287035
John Moffat
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That is OK then because it will have MCQ’s 🙂
December 2, 2015 at 7:14 pm #287063
farhana001
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Ok Sir.
Thanks a lot for the explanations.

Gob bless you.
December 3, 2015 at 7:25 am #287135
John Moffat
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You are welcome 🙂
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