Cookie Co. issued rights to subscribe to its share capital, the ownership of 5 rights entitling the shareholders to subscribe for 1 share at par, P125. The investor owned 25,000 shares with total cost of P2,100,000. The stock rights are accounted for separately.

a). What is the value of the rights if the share is quoted at P155 right-on?
b). If 10,000 rights were exercised, 10,000 rights were sold for P15 and the balance left to expire, how much is the NET gain or loss in the stock rights transaction?

Answer rating: 100% (QA)

Total right share investor entitled to Total shares 5 D250005 ... View the full answer