Question 4a, b
Marking Guide
| (a) | rights issue price | 1 | |
| theoretical ex rights price | 2 | ||
| max marks | 3 | ||
| (b) | nominal value of bonds redeemed | 1 | |
| interest saved on redeemed bonds | 1 | ||
| earnings per share after redemption | 1 | ||
| current price/earnings ratio | 1 | ||
| revised share price | 1 | ||
| comment on acceptability to shareholders | 1-2 | ||
| comment on constant price/earnings ratio | 1-2 | ||
| max marks | 7 |