Scribd Logo
Upload

Welcome to Scribd!

  • Reggie Arriola Financial Management 2 Final Examination

    Uploaded by

    Reggie
    14 views1 page
    This document contains the answers to a final exam for a financial management course. It includes 20 true/false questions answered with true or false and the solutions to two problems involving calculations of stock rights and prices. The problems determine the price per right based on the regular and discount stock prices before and after the rights offering.

    Original Description:

    financial management 2

    Original Title

    Arriola-Finman-2-Finals

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document contains the answers to a final exam for a financial management course. It includes 20 true/false questions answered with true or false and the solutions to two problems involving calculations of stock rights and prices. The problems determine the price per right based on the regular and discount stock prices before and after the rights offering.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    14 views1 page

    Reggie Arriola Financial Management 2 Final Examination

    Uploaded by

    Reggie
    This document contains the answers to a final exam for a financial management course. It includes 20 true/false questions answered with true or false and the solutions to two problems involving calculations of stock rights and prices. The problems determine the price per right based on the regular and discount stock prices before and after the rights offering.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Reggie Arriola

    Financial Management 2
    Final Examination

    True or False
    1. True 6. False 11. False 16. False
    2. False 7. True 12. True 17. True
    3. True 8. False 13. True 18. True
    4. True 9. True 14. False 19. True
    5. False 10. True 15. True 20. True

    Problems
    1.
    a. Regular Price P50 (1 right; FMV)
    Discount Price 40 (5 rights; Subscription Price)
    Price Difference P10 / 6 rights = P1.67 per right

    b. Ex Rights Price P50 (5 rights; FMV) = P250 (5)


    Discount Price 40 (1 right; Subscription Price) = 40 (1)
    Price Difference P290 / 6 rights = P48.33

    c. Ex Rights Price P50 (5 rights; FMV)


    Discount Price 40 (Subscription Price)
    Price Difference P10 / 5 rights = P2.00

    2.
    a. Rights-on market price = P50.00 per share

    b. Shares Outstanding 800,000


    --------------------------------------- = 4 rights per share
    New Shares 200,000

    c. Regular Price P50 (1 right; FMV)


    Discount Price 40 (4 rights; Subscription Price)
    Price Difference P10 / 5 rights = P2.00 per right

    d. Ex Rights Price P50 (4 rights; FMV) = P200 (4)


    Discount Price 40 (1 right; Subscription Price) = 40 (1)
    Price Difference P240 / 5 rights = P48.00

    You might also like