MENU
A company needs to raise $20 million to finance a project.
It has decided on a rights issue at a discount of 20% to its current market share price.
There are currently 20 million shares in issuewith a nominal value of $1 and a marketprice of $5per share.
Calculate the terms of the rights issue.
Suggested Answer: A, B, D
Get Premium CIMAPRA19-F03-1 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
32 comments · newest first
JO
Jolene
11 months ago
I thought it might be A at first, but C makes more sense.
JE
Jettie
11 months ago
Just did the numbers, and yep, it's definitely C!
DE
Deeanna
11 months ago
Wait, are we sure about that? Seems off.
CH
Chantell
12 months ago
Totally agree, that math checks out!
AI
Ailene
12 months ago
It's 1 new share for every 5 existing shares.
WH
Whitney
1 year ago
I think the answer could be option C, but I’m not entirely sure how to break down the calculations. I wish I had practiced more with these types of questions!
RU
Ruthann
1 year ago
I feel like I might be overthinking this. Is it 1 new share for every 5 existing shares? That seems to fit with the numbers, but I’m not completely confident.
CI
Ciara
1 year ago
If the market price is $5 and they’re offering a 20% discount, that makes it $4 per new share. I think we need to figure out how many shares they need to issue to raise $20 million.
MI
Mila
1 year ago
I remember we practiced a similar question about rights issues, but I’m not sure how to calculate the exact terms here.
IL
Iluminada
1 year ago
I feel confident I can solve this. I just need to do the math carefully and double-check my work.
GI
Giuseppe
1 year ago
I've seen questions like this before. I think the key is to calculate the new share price after the discount, then use that to determine the number of new shares that need to be issued.
EL
Elliot
1 year ago
Hmm, I'm a bit unsure about how to approach this. The discount and the number of new shares to issue are the key pieces of information I need to figure out.
MA
Madalyn
1 year ago
Okay, let's break this down step-by-step. We have the total amount to raise, the discount, and the current share details. I think I can work this out.
KR
Krissy
1 year ago
This looks like a straightforward calculation, but I want to make sure I understand all the details before I start.
LI
Ling
1 year ago
Hmm, I'm a bit unsure about this one. I'll need to review the GDPR requirements and think through the implications of each approach before deciding.
JI
Jina
1 year ago
I don't know about you, but I'm just here for the free snacks. What do you mean there's a test? I thought this was a party!
DI
Dianne
1 year ago
Seriously, you guys are overthinking this. The answer is clearly C. 1 new share for every 5 existing shares. It's simple math, really. Although, I do have to admit, the 20% discount is a nice perk.
BE
Bethanie
1 year ago
I'm with you on this one, it's option C. The discount makes it even better.
LY
Lynelle
1 year ago
I think it's option A. Are you sure about C?
DU
Dulce
1 year ago
I agree, it's definitely option C. The discount is a good deal.
AD
Adolph
1 year ago
I don't know, you guys. This is a bit tricky. Let me think this through... Okay, I've got it! The answer has to be D. 1 new share for every 25 existing shares. Trust me, I'm an expert at these types of questions. (Or am I?)
CL
Clarence
1 year ago
I think you might be onto something. I'll go with C) 1 new share for every 5 existing shares.
NA
Nadine
1 year ago
I'm not convinced. I believe the correct answer is B) 1 new share for every 20 existing shares.
RA
Rachael
1 year ago
Are you sure about that? I think the answer might be A) 1 new share for every 4 existing shares.
GL
Glenn
1 year ago
Wait, wait, wait... Did you see that market price of $5 per share? That means the discounted price will be $4 per share. I'm going with option A, 1 new share for every 4 existing shares. This is going to be easy money!
LU
Lucy
1 year ago
Let's go with option A, 1 new share for every 4 existing shares. It seems like a good opportunity to raise the necessary funds.
BE
Bettye
1 year ago
I agree, option A seems like the most logical choice based on the information provided.
CH
Cherry
1 year ago
I think you're right, the discounted price will be $4 per share. Option A sounds like the best choice.
DE
Devorah
1 year ago
Okay, let's see... Hmm, I think the answer is C. 1 new share for every 5 existing shares. That seems to make the most sense given the discount and the number of shares in issue.
BE
Berry
2 years ago
I'm not sure, but I think the answer is C) 1 new share for every 5 existing shares. Can someone explain the rationale behind the correct answer?
LO
Loreen
2 years ago
I agree with Casie. It makes sense because the company needs to raise $20 million and the discount is 20%.
CA
Casie
2 years ago
I think the answer is A) 1 new share for every 4 existing shares.