Accounting for right issue

Accountancy

Theoretically, the value of a company's shares after a right issue must equal the sum of market capitalisation immediately prior to rights issue and the cash flows generated from the rights issue. Please explain

Rinuja TK

CA Inter

★ 10K+

09-Jun-22 09:29

578

Answers (2)

Say the value of a company is 1,00,000 before the rights issue The company raised 50,000 by way of rights issue So theoretically, the value of the company should be 1,50,000 post rights.

CA Suraj Lakhotia

Admin

09-Jun-22 14:42

Thank you

Thread Starter

Rinuja TK

CA Inter

★ 10K+

10-Jun-22 10:26