Jumpjet plc has 6,000,000 ordinary shares in issue and the company has been making regular annual profits after tax of £3,000,000 for some years. The share price is £5. A proposal has been made to issue 2,000,000 new shares in a rights issue, at an issue price of £4.50 per share.

Calculate the TERP.

Answer rating: 100% (QA)

To calculate the Theoretical ExRights Price TERP after the issuance of new shares in a rights issue ... View the full answer