Question

A company offers two shares of every five held to his shareholders. The issue price is Rs 14 and share price in the market is Rs 19. What is the market value of a right?​

Answer 1

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Average price of one share: Rs. 600 / 3 = Rs. 200

Value of the right = Market value – Average price

Rs. 240 – Rs. 200

Value of right = Rs. 40