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Hello Sir, is the low price leading to excessive eps dilution in the sense that more shareholders take up rights? so greater no. of shares and we just want a certain no. of SH to take up rights?
”A company making a rights issue must set a price which is low enough to secure the acceptance of shareholders, who are being asked to provide extra funds, but not too low, so as to avoid excessive dilution of the earnings per share. ”
The lower the issue price, the more shares will need to be issued to raise the required amount. The more shares issued then the lower will be the EPS.
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