A Owns 1000 Shares in XYZ Ltd Whose Current Share

question 32

Multiple Choice

A owns 1000 shares in XYZ Ltd whose current share price (cum rights) is $2 per share.XYZ Ltd makes a one for four rights issue with a subscription price of $1.40 per share.Calculate the value of R,of the right to one new share.

• A)8 cents.
• B)40 cents.
• C)48 cents.
• D)84 cents.

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