Let us continue with the above illustration of Jai Investment and Finance Ltd. Assume that the company
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Let us continue with the above illustration of Jai Investment and Finance Ltd. Assume that the company disposed off its holding to Imam Saheb Ltd. on a cum-right basis @ Rs. 846 per share. Imam Saheb Ltd. decided not to subscribe to the rights and therefore renounced them @ Rs. 220 each. Determine the cost of shares to Imam Saheb Ltd. under the following two situations:
1. The market price ex-right was Rs. 775 per share.
2. The market price ex-right was Rs. 694 per share.
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