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Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40?
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Raj industries limited offers equity shares to its existing shareholde...
**Value of a Right Issue**
The value of a right issue can be calculated by comparing the issue price with the market value of the shares. In this case, Raj Industries Limited is offering equity shares to its existing shareholders at a rate of 2 shares for every 5 shares held by them. The right issue price is Rs180 per share, and the market value is Rs200 per share.
To calculate the value of a right, we need to consider the following factors:
1. Issue Price:
- The issue price is the price at which the company is offering the shares to its existing shareholders.
- In this case, the right issue price is Rs180 per share.
2. Market Value:
- The market value is the current price at which the shares are trading in the market.
- In this case, the market value is Rs200 per share.
3. Ratio of Shares:
- The company is offering 2 shares for every 5 shares held by the existing shareholders.
- This means that for every 5 shares held, the shareholder is entitled to buy 2 additional shares at the right issue price.
**Calculating the Value of a Right:**
To calculate the value of a right, we can follow these steps:
1. Calculate the market value of the shares held by the existing shareholders:
- If the market value is Rs200 per share, then the market value of 5 shares would be 5 x Rs200 = Rs1000.
2. Calculate the value of the right:
- The value of the right is the difference between the market value and the issue price.
- In this case, the value of the right would be Rs200 - Rs180 = Rs20.
**Answer:**
Therefore, the value of a right in this case is Rs20. (Option A)
The value of a right issue can be calculated by comparing the issue price with the market value of the shares. In this case, Raj Industries Limited is offering equity shares to its existing shareholders at a rate of 2 shares for every 5 shares held by them. The right issue price is Rs180 per share, and the market value is Rs200 per share.
To calculate the value of a right, we need to consider the following factors:
1. Issue Price:
- The issue price is the price at which the company is offering the shares to its existing shareholders.
- In this case, the right issue price is Rs180 per share.
2. Market Value:
- The market value is the current price at which the shares are trading in the market.
- In this case, the market value is Rs200 per share.
3. Ratio of Shares:
- The company is offering 2 shares for every 5 shares held by the existing shareholders.
- This means that for every 5 shares held, the shareholder is entitled to buy 2 additional shares at the right issue price.
**Calculating the Value of a Right:**
To calculate the value of a right, we can follow these steps:
1. Calculate the market value of the shares held by the existing shareholders:
- If the market value is Rs200 per share, then the market value of 5 shares would be 5 x Rs200 = Rs1000.
2. Calculate the value of the right:
- The value of the right is the difference between the market value and the issue price.
- In this case, the value of the right would be Rs200 - Rs180 = Rs20.
**Answer:**
Therefore, the value of a right in this case is Rs20. (Option A)
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Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40?
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Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40?.
Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40?.
Solutions for Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? in English & in Hindi are available as part of our courses for Commerce.
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Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40?, a detailed solution for Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? has been provided alongside types of Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40? theory, EduRev gives you an
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