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For the F7 exam, how do I calculate the rights fraction?
By the no. of shares after/no. of shares before, or
by the cost of the shares/no. or shares for before and after issue?This is: rights fraction according to your P2 lectures, or
rights fraction according to the F7 revision lectures for past examsI cannot believe that I have been inconsistent between F7 and P2 …. particularly since the first alternative you have given me (“no. of shares after/no. of shares before”) is in fact the BONUS fraction.
You need a little table to calculate the rights fraction but, in prose, the rights fraction is the market price of a share BEFORE the rights issue / the theoretical price of a share AFTER the rights issue
Do me a favour please and check up the lectures – if in fact I have been inconsistent (and wrong! Heaven forbid) please let me know and give me references
Many thanks
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