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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 pleaseYou 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.)
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