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      Question

      Which among the following is the correct formula for

      value of right under the rights issue?
      A Market Price – Average price of a share including the right share Correct Answer Incorrect Answer
      B Market Price – Average price of a share excluding the right share Correct Answer Incorrect Answer
      C Right Price – Average price of a share including the right share Correct Answer Incorrect Answer
      D Right Price – Average price of a share excluding the right share Correct Answer Incorrect Answer
      E Face value of the share Correct Answer Incorrect Answer

      Solution

      Value of right = Market Price – Average price of a share including the right share

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