Work out rights issue value instantly with clear inputs, formula shown and shareable results.
A rights issue sells new shares below market price, so the share price falls to a theoretical ex-rights price that blends old and new. The value of a right is the gap between that price and the issue price — which is what a non-participating holder gives up.
Theoretical ex-rights price
TERP = (N × cum-rights price + issue price) / (N + 1); right value = TERP - issue price
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
Your holding is diluted and you lose the value of the rights, unless the issuer sells them on your behalf.
Not necessarily. It depends on what the capital is for — growth funding is read very differently from repairing a balance sheet.