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Sir, can you please explain to me this answer:
Compton plc has announced a 1 for 4 rights issue at a subscription price of $2.50. The current cum-rights price of the shares is $4.10
What is the new ex-div market value of shares?
The answer is $3.784 shares are currently worth 4 x $4.10 = £16.40
1 new share costs $2.50Therefore 5 shares are now worth $18.90, which is 18.90/5 = $3.78 per share
This is all explained in detail in my free lectures.
The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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