Theoretical ex-rights price

From Wikipedia, the free encyclopedia

Theoretical ex-rights price (TERP) is a calculated price for a company's stock shares after issuing new rights-shares with the assumption, that all these new issued shares are taken up by the existing shareholders. The consequence would be, that the price will be lower than the old shares were, but higher than the new issed shares are^[1][2].

[edit] Example

If there is 1 new share at 800 pence (p) and 4 old shares at 1000p, than value for the 5 shares would be 4800 so that one of the "mixed" shares would be at 960p.

[edit] References

1. ^ Theoretical Ex-Rights Price. investopedia.com. Retrieved on 2008-03-02.
2. ^ (2006). "Chief Examiner's Report, Global Operations Management, Diploma Winter 2006". . Securities and Investment Institute Retrieved on 2008-03-02. See page 2.