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Identify and evaluate the options available to an investor holding 1000 ordinary shares in the company upon receipt of one for five rights offer.
Barclays plc has the following structure:
25p ordinary shares £15000
Share premium account £2000
Retained profit £4560
Total £21560The ordinary shares are currently being traded on the stock exchange at £1.80 each. At a recent board of directors meeting it was decided to undertake an ambitious expansion programme and to finance this with a one for five rights issue at £1.50 per share.
Please do not set full questions and expect us to simply provide an answer – you must have an answer in the same book in which you have found the question. Use this forum to ask about whatever in the printed answer you do not understand.
If you watch the free lectures on rights issues then everything you need for this question is covered.
Our lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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