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This sort of thing is best left up to data providers
who do it professionally, especially in markets where these sorts of things
happen all the time.
Here's a generic formula:
For a A for B rights issue at $C where the stock was
trading at $D before the ex-date, the adjustment (dilution) factor
is:
(C*A/(A+B))+(D*B/(A+B))/D
The expected price for the the stock to open on the ex
date is:
(C*A/(A+B))+(D*B/(A+B))
In your example, this means the stock should open
around $0.4267
Best regards,
Richard
Dale.
Norgate Investor Services
- Premium quality Stock, Futures and
Foreign Exchange Data for
markets in Australia, Asia, Canada, Europe,
UK & USA -
Hi,
Can someone advise how do we do the share
price
adjustment for stock rights issue.
e.g.
for Stock "A"
trading at $0.50 before rights issue.
If the rights issue is 1 rights for 5
existing shares
at $0.06, what is the price after the ex-date of
rights
issue?
many
thanks.
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