Periodic discount rate and Rights issue: Difference between pages

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imported>Doug Williamson
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imported>Doug Williamson
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A cost of borrowing - or rate of return - expressed as:
A process of issuing new equity shares where they are offered first to existing shareholders in proportion to their existing shareholding.


*The excess of the amount at the end over the amount at the start
Existing shareholders have, under law in the UK, pre-emption rights. 
*Divided by the amount at the end


This means that they generally have first refusal on the purchase of any new equity shares.


==Example 1==
GBP 1 million is borrowed.


GBP 1.03 million is repayable at the end of the period.
== See also ==
* [[Bonus issue]]
* [[Dividend irrelevancy theory]]
* [[Headroom]]
* [[Initial public offering]]
* [[Nil paid]]
* [[Option premium]]
*[[Placing]]
* [[Pre-emption rights]]
* [[Theoretical ex-rights price]]
* [[Trombone]]


 
[[Category:Accounting,_tax_and_regulation]]
The periodic discount rate (d) is:
[[Category:The_business_context]]
 
[[Category:Corporate_finance]]
(End amount - start amount) / End amount
[[Category:Investment]]
 
[[Category:Long_term_funding]]
= (1.03 - 1) / 1.03
[[Category:Financial_products_and_markets]]
 
= 0.029126
 
= 2.9126%
 
 
==Example 2==
GBP 0.97 million is borrowed or invested
 
GBP 1.00 million is repayable at the end of the period.
 
 
The periodic discount rate (d) is:
 
(End amount - start amount) / End amount
 
= (1.00 - 0.97) /  1.00
 
= 0.030000
 
= 3.0000%
 
 
==See also==
 
*[[Effective annual rate]]
*[[Discount rate]]
*[[Periodic yield]]
*[[Yield]]

Revision as of 06:53, 23 August 2019

A process of issuing new equity shares where they are offered first to existing shareholders in proportion to their existing shareholding.

Existing shareholders have, under law in the UK, pre-emption rights.

This means that they generally have first refusal on the purchase of any new equity shares.


See also