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CIMA Exam CIMAPRA19-F03-1 Topic 3 Question 88 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 88
Topic #: 3
[All CIMAPRA19-F03-1 Questions]

A company needs to raise $20 million to finance a project.

It has decided on a rights issue at a discount of 20% to its current market share price.

There are currently 20 million shares in issuewith a nominal value of $1 and a marketprice of $5per share.

Calculate the terms of the rights issue.

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Suggested Answer: A, B, D

by Lyda at May 30, 2024, 07:00 PM

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Jina
2 months ago
I don't know about you, but I'm just here for the free snacks. What do you mean there's a test? I thought this was a party!
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Dianne
2 months ago
Seriously, you guys are overthinking this. The answer is clearly C. 1 new share for every 5 existing shares. It's simple math, really. Although, I do have to admit, the 20% discount is a nice perk.
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Bethanie
3 days ago
I'm with you on this one, it's option C. The discount makes it even better.
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Lynelle
17 days ago
I think it's option A. Are you sure about C?
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Dulce
29 days ago
I agree, it's definitely option C. The discount is a good deal.
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Adolph
2 months ago
I don't know, you guys. This is a bit tricky. Let me think this through... Okay, I've got it! The answer has to be D. 1 new share for every 25 existing shares. Trust me, I'm an expert at these types of questions. (Or am I?)
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Clarence
29 days ago
I think you might be onto something. I'll go with C) 1 new share for every 5 existing shares.
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Nadine
1 months ago
I'm not convinced. I believe the correct answer is B) 1 new share for every 20 existing shares.
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Rachael
2 months ago
Are you sure about that? I think the answer might be A) 1 new share for every 4 existing shares.
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Glenn
2 months ago
Wait, wait, wait... Did you see that market price of $5 per share? That means the discounted price will be $4 per share. I'm going with option A, 1 new share for every 4 existing shares. This is going to be easy money!
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Lucy
1 months ago
Let's go with option A, 1 new share for every 4 existing shares. It seems like a good opportunity to raise the necessary funds.
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Bettye
2 months ago
I agree, option A seems like the most logical choice based on the information provided.
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Cherry
2 months ago
I think you're right, the discounted price will be $4 per share. Option A sounds like the best choice.
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Devorah
2 months ago
Okay, let's see... Hmm, I think the answer is C. 1 new share for every 5 existing shares. That seems to make the most sense given the discount and the number of shares in issue.
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Berry
3 months ago
I'm not sure, but I think the answer is C) 1 new share for every 5 existing shares. Can someone explain the rationale behind the correct answer?
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Loreen
3 months ago
I agree with Casie. It makes sense because the company needs to raise $20 million and the discount is 20%.
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Casie
3 months ago
I think the answer is A) 1 new share for every 4 existing shares.
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