CA Foundation Exam > CA Foundation Questions > Value of the right =?a)Market value plus the ...
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Value of the right =?
- a)Market value plus the average price of the share
- b)Market value less average price of the share
- c)Market value multiplied by ad. adjustment factor
- d)Market value less average price of the share multiplied by an adjustment factor
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Value of the right =?a)Market value plus the average price of the shar...
Value of the right = Market value less average price of the share
- Market value: The current price of the share in the market.
- Average price of the share: The average price at which the share has been traded over a specific period.
- Calculation: The value of the right is obtained by subtracting the average price of the share from the market value.
- Significance: This calculation helps investors understand the potential value of the right attached to a share.
Most Upvoted Answer
Value of the right =?a)Market value plus the average price of the shar...
Calculation of the Value of the Right
The correct answer is option 'B', which states that the value of the right is determined by subtracting the average price of the share from the market value. Let's break down the calculation in detail:
Market Value:
- The market value refers to the current price at which a share is trading in the market. This is the price at which investors are willing to buy or sell the stock.
Average Price of the Share:
- The average price of the share is the mean price at which the stock has been trading over a specific period. It is calculated by summing up all the prices and dividing by the number of observations.
Calculation:
- To calculate the value of the right, you subtract the average price of the share from the market value. This gives you the difference between the current trading price and the average price.
Significance:
- This calculation helps investors understand the value of the rights they hold in relation to the current market price. It provides insight into whether the rights are trading at a premium or discount compared to the average price.
Therefore, the correct way to determine the value of the right is by subtracting the average price of the share from the market value.
The correct answer is option 'B', which states that the value of the right is determined by subtracting the average price of the share from the market value. Let's break down the calculation in detail:
Market Value:
- The market value refers to the current price at which a share is trading in the market. This is the price at which investors are willing to buy or sell the stock.
Average Price of the Share:
- The average price of the share is the mean price at which the stock has been trading over a specific period. It is calculated by summing up all the prices and dividing by the number of observations.
Calculation:
- To calculate the value of the right, you subtract the average price of the share from the market value. This gives you the difference between the current trading price and the average price.
Significance:
- This calculation helps investors understand the value of the rights they hold in relation to the current market price. It provides insight into whether the rights are trading at a premium or discount compared to the average price.
Therefore, the correct way to determine the value of the right is by subtracting the average price of the share from the market value.
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Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer?
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Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer?.
Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Value of the right =?a)Market value plus the average price of the shareb)Market value less average price of the sharec)Market value multiplied by ad. adjustment factord)Market value less average price of the share multiplied by an adjustment factorCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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