Dear Sir Moffat,
If Market share price falls below the face value, what price the right issue would be? Lower than Market SP ?
Ask the Tutor ACCA FM
Right Issue
12y ago#1The nominal value (face value) is not relevant at all.
The rights issue can legally be at any price the company wants. However it will be below the current market value of the shares, otherwise nobody will want to buy the rights - it would be cheaper for them to buy the shares on the stock exchange.
Simple Logic. Thanks
12y ago#3You are welcome :-)
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