• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

MOCK 1 MCQ NUM 15 BPP

Forums › ACCA Forums › ACCA FM Financial Management Forums › MOCK 1 MCQ NUM 15 BPP

  • This topic has 1 reply, 2 voices, and was last updated 9 months ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • April 21, 2022 at 10:43 am #654182
    Shi2004
    Participant
    • Topics: 79
    • Replies: 33
    • ☆☆

    Hello sir im having a problem with this question. Please help.
    Question : Drumlin vo has $5m of $0.50 nominal value ordinary shares in issue. It recently announced a 1for 4 RI at $6 per share. Its share price on the announcement of the RI was $8 per share. What is the theoretical value of a right per existing share?

    Answer : value of right = 5m *8 +1.25*6 divided by 6.25m – $6 divided by 4 =0.40
    Can you explain the answer please

    April 21, 2022 at 4:26 pm #654218
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51545
    • ☆☆☆☆☆

    There are currently $5M/0.5 = 10M shares in issue, and therefore they are issuing 2.5M new shares.

    So the TERP is ((10M x $8) + (2.5M x $6)) / 12.5M = $7.60.

    Therefore the value of the rights is 7.60 – 6.00 = $1.60 per each new share.

    It needs 4 existing shares to get the right to 1 new share and therefore the value of the rights is $1.60/4 = $0.40 per existing share.

    This is all explained in my free lectures. The lectures are a complete free course and cover everything needed to be able to pass the exam well.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • ashif94 on Revaluation Reserve – ACCA Financial Accounting (FA) lectures
  • jcacca15 on PPE – revaluation upwards – ACCA Financial Reporting (FR)
  • jcacca15 on PPE – Introduction – ACCA Financial Reporting (FR)
  • jcacca15 on PPE – Introduction – ACCA Financial Reporting (FR)
  • shazleen on ACCA AB Chapter 10 – Management – Questions

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy