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A company is considering a rights issue of one new share for every three shares held, at a price of £4.60. The existing shares have a nominal value of 1p, a book value of £2.75, and a market value of £5. What is the theoretical ex-rights price? a. £5.00 b. £4.90 c. £3.90 d. £3.21

A company is considering a rights issue of one new share for every three shares held, at a price of £4.60. The existing shares have a nominal value of 1p, a book value of £2.75, and a market value of £5. What is the theoretical ex-rights price? a. £5.00 b. £4.90 c. £3.90 d. £3.21

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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  1. A company is considering a rights issue of one new share for every three shares held, at a price of £4.60. The existing shares have a nominal value of 1p, a book value of £2.75, and a market value of £5. What is the theoretical ex-rights price?

    a. £5.00 b. £4.90 c. £3.90 d. £3.21

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