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Calculate the theoretical ex-rights value per share

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Reference no: EM133186406

Question - 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.

Required - Calculate the theoretical ex-rights value per share in £ to two decimal places.

Reference no: EM133186406

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