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CIMA Exam CIMAPRA19-F03-1 Topic 4 Question 109 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 109
Topic #: 4
[All CIMAPRA19-F03-1 Questions]

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.

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Suggested Answer: A

Calc_Set2


by Willard at Apr 03, 2025, 04:27 PM

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Louvenia
20 days ago
Oof, this is a tough one. I'm leaning towards option C, but I'm also a little worried that I might be overthinking it. At the end of the day, it's all about the numbers, right? *scratches head*
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Beth
2 days ago
Yeah, I agree. Option C seems like the most logical choice based on the information given.
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Freida
3 days ago
I think you're on the right track with option C. It's all about the numbers, just trust your gut.
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Cecil
1 months ago
Alright, let's do this! I'm going with option A. One new share for every four existing shares sounds about right. Plus, it's the first option, so it must be the easiest one, right? *laughs*
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Marvel
20 days ago
I agree with you, option A seems like the most logical choice. It's a simple ratio to follow.
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Dalene
22 days ago
User2: Agreed, that seems like the most logical choice.
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Mi
23 days ago
User1: I think option A is the way to go. One new share for every four existing shares.
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Mabel
1 months ago
I'm not sure about the calculation, but I think the terms of the rights issue should be A) 1 new share for every 4 existing shares.
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Mignon
1 months ago
Hmm, I'm not too sure about this one. Maybe option D? Doesn't seem like a lot of shares need to be issued for $20 million. I wonder if the person who wrote this question has ever tried to raise capital before.
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Zita
2 days ago
I see where you're coming from, but I still think it's option A.
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Catarina
13 days ago
Really? I was leaning towards option C, 1 new share for every 5 existing shares.
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Ashleigh
19 days ago
I think it's actually option A, 1 new share for every 4 existing shares.
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Mendy
1 months ago
I agree with Tommy. The discount of 20% means the new share price will be $4, which is 20% less than the current market price of $5.
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Lashandra
1 months ago
I think option C is the correct answer. The company needs to raise $20 million, and with a 20% discount, the new share price would be $4. With 20 million shares currently in issue, the company would need to issue 5 million new shares to raise the required $20 million.
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Tommy
1 months ago
I think the answer is A) 1 new share for every 4 existing shares.
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