The issued share capital of a company consists of 1,680,000 ordinary shares of £1 each. Half way through its financial year the company made a rights issue of 2 for 4 at an exercise price of £1.66 a share. The market value of the company's shares was £2.19 a share just before the rights issue.. The company reported a net profit after taxation for the year of £672,000. The market value of each ordinary share at the end of the year was £2.82. Calculate the theoretical ex-rights value per share in £ to two decimal places.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The issued share capital of a company consists of 1,680,000 ordinary shares of £1 each.
Half way through its financial year the company made a rights issue of 2 for 4 at an exercise
price of £1.66 a share.
The market value of the company's shares was £2.19 a share just before the rights issue..
The company reported a net profit after taxation for the year of £672,000.
The market value of each ordinary share at the end of the year was £2.82.
Calculate the theoretical ex-rights value per share in £ to two decimal places.
Transcribed Image Text:The issued share capital of a company consists of 1,680,000 ordinary shares of £1 each. Half way through its financial year the company made a rights issue of 2 for 4 at an exercise price of £1.66 a share. The market value of the company's shares was £2.19 a share just before the rights issue.. The company reported a net profit after taxation for the year of £672,000. The market value of each ordinary share at the end of the year was £2.82. Calculate the theoretical ex-rights value per share in £ to two decimal places.
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