Page 401 - F2 Integrated Workbook STUDENT 2019
P. 401
Chapter 19
Answers
Chapter 1
Example 1.1
Answer = $2.95
Workings
The theoretical ex rights price (TERP) is:
= [(3 × $3.20) + (1 × $2.20]/4 = $2.95
Alternatively, TERP can be calculated by looking at the total value of all the
shares as follows:
(1m × 3.2) + ((1/3 × 1m) × 2.2)
––––––––––––––––––––––––– = $2.95
1m + (1/3 × 1m)
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