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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Definitions:

Impaired Asset

An asset that has a market value significantly less than its carrying value on the balance sheet, indicating it may not be recoverable.

Net Book Value

The value of an asset as recorded on the balance sheet, calculated by subtracting accumulated depreciation or amortization from its original cost.

Trend Analysis

The process of comparing business data over time to identify any consistent results or trends.

Aging Asset Base

Refers to a company's fixed assets becoming older and potentially less efficient or valuable over time.