Question

    Which among the following is the correct formula for value of right under the rights issue?

    A Market Price – Average price of a share including the right share Correct Answer Incorrect Answer
    B Market Price – Average price of a share excluding the right share Correct Answer Incorrect Answer
    C Right Price – Average price of a share including the right share Correct Answer Incorrect Answer
    D Right Price – Average price of a share excluding the right share Correct Answer Incorrect Answer
    E Face value of the share Correct Answer Incorrect Answer

    Solution

    Value of right = Market Price – Average price of a share including the right share

    Practice Next