Indian Textiles has 1 million outstanding shares and the share price on September 1 is INR 560. Call options with expiry on November 28 are available with an exercise price of INR 600 and are selling at INR 35. The contract size is 950. On October 1, Indian Textiles announces a bonus issue of additional 200,000 shares with the holder-of-record date of October 5. 

What will be the adjustment to option terms on October 5?

Answer rating: 100% (QA)

The adjustment to option terms on October 5 are as follows The effect of bonus is... View the full answer