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- May 19, 2020 at 4:58 am
In part D, I can’t understand the fraction part. Please help me understand the logic behind using price before/price after and then multiplying it with the others to get weighted average? Also, what do you mean by theoretical ex-rights price for price after?
May 20, 2020 at 8:44 pmI’d not worry too much about the logic as it is far too complicated and isn’t required for the exam.
The price after is also referred to as the theoretical ex-rights price. Theoretical as it is calculated on an expectation of the price, ex-rights as it is after the rights issue.
Thanks
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