Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$5,691.61
Visitor$1,190.00
Gisele$936.78
doctor$860.00
Visitor$800.00
Visitor$770.00
aurora$629.43
Visitor$580.00
Visitor$568.33
Visitor$500.87
Visitor$500.00
Visitor$497.24
Visitor$477.00
Visitor$470.00
Visitor$468.78
tomtomtom$453.98
Visitor$440.00
royal ne...$430.00
Visitor$419.43
Visitor$400.00
 

Question 214  rights issue

In late 2003 the listed bank ANZ announced a 2-for-11 rights issue to fund the takeover of New Zealand bank NBNZ. Below is the chronology of events:

  • 23/10/2003. Share price closes at $18.30.

  • 24/10/2003. 2-for-11 rights issue announced at a subscription price of $13. The proceeds of the rights issue will be used to acquire New Zealand bank NBNZ. Trading halt announced in morning before market opens.

  • 28/10/2003. Trading halt lifted. Last (and only) day that shares trade cum-rights. Share price opens at $18.00 and closes at $18.14.

  • 29/10/2003. Shares trade ex-rights.

All things remaining equal, what would you expect ANZ's stock price to open at on the first day that it trades ex-rights (29/10/2003)? Ignore the time value of money since time is negligibly short. Also ignore taxes.




Copyright © 2014 Keith Woodward