Corporate actions · Question 11 of 12
A share of Muster AG trades at 60 euros. In a 4:1 capital increase, new shares are offered at 40 euros. What is the theoretical value of one subscription right?
1 answer is correct. Hard
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Answer
- D 4 euros
Explanation
The theoretical value is (old price − subscription price) / (subscription ratio + 1), here (60 − 40) / (4 + 1) = 4 euros. The 4:1 ratio means that four old shares entitle you to one new share. Anyone who calculates 20 euros forgets that the advantage is spread over four old shares and that the price falls after the measure.