Briefly explain the meaning of the term "deep-discounted rights issue".

      

Briefly explain the meaning of the term "deep-discounted rights issue".

  

Answers


Kavungya
In deep discounted rights issue, the new shares are priced at a large discount to the current market
price per share (MPS). The purpose is to ensure that the issue is well subscribed and thus
attractive when the market is volatile.
The disadvantage is that a large number of shares will need to be issued in order to raise the
required finance, and this will lead to a large dilution of earnings per share (EPS) and dividend
per share (DPS).
Kavungya answered the question on March 30, 2022 at 07:31


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