The Calculation of the Theoretical Ex-Rights Price of a Share

question 39

Multiple Choice

The calculation of the theoretical ex-rights price of a share may be expressed as:

• A) (Aggregate market price per share immediately prior to exercise of rights plus dividends receivable on the shares) divided by number of shares outstanding after the exercise of rights.
• B) (Aggregate market price per share immediately prior to exercise of rights plus proceeds from the exercise of rights) divided by number of shares outstanding after the exercise of rights.
• C) (Aggregate market price per share immediately after the exercise of rights plus proceeds from the exercise of rights) divided by number of shares outstanding before the exercise of rights.
• D) (Aggregate market price per share immediately after the exercise of rights plus proceeds from the exercise of rights) divided by number of shares outstanding after the exercise of rights.
• E) None of the given answers.

---

Definitions:

Factory Utility Costs

Expenses incurred for utilities within a manufacturing facility, such as electricity, water, gas, and sewage services.

Manufacturing Overhead

Indirect costs associated with manufacturing, including expenses like utilities, depreciation, and salaries for managers.

Job-Order Costing System

Job-Order Costing System is an accounting method used to assign manufacturing costs to an individual product or batch of products, making it possible to track the cost associated with specific jobs or orders.

Overapplied

A situation where the allocated manufacturing overhead costs exceed the actual overhead costs incurred.