Theoretical ex-rights price
- Theoretical ex-rights price
Theoretical ex-rights price (TERP) is a calculated price for a company's stock shares after issuing new rights-shares with the assumption, that all these new issued shares are taken up by the existing shareholders. The consequence would be, that the price will be lower than the old shares were, but higher than the new issued shares are [cite web |title=Theoretical Ex-Rights Price |publisher=investopedia.com |url=http://www.investopedia.com/terms/t/theoreticalexrightsprice.asp |accessdate=2008-03-02] [cite paper |title=Chief Examiner's Report, Global Operations Management, Diploma Winter 2006 |publisher=Securities and Investment Institute |date=2006 |url=http://www.sii.org.uk/SII/WEB5/sii_files/Qualifications/Diploma/Diploma%20website/Reports%20W%2006/GOM.pdf |accessdate=2008-03-02 See page 2.] .
Example
If there is 1 new share at 800 pence (p) and 4 old shares at 1000p each, than value for the 5 shares would be 4800 so that one of the "mixed" shares would be at 960p.
References
Wikimedia Foundation.
2010.
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