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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Right Issue
Dear Sir Moffat,
If Market share price falls below the face value, what price the right issue would be? Lower than Market SP ?
The 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
You are welcome 🙂