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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › % of rights resulting from an issue
Please advise the procedure to the following example:
The share price of CP plc is $4 per share. They announced a 1 for 5 rights issue at $3.10 p/share.
What % of the rights offered to a shareholder does the shareholder need to take up so as to have no net cash flow resulting from the issue?
Thank you
You need to watch the lecture on Rights Issues (it is under the heading Sources of finance – equity) because I explain the procedure for doing this in that lecture.