Neco 2023 Commerce Question 29
Practice objective / multiple choice question 29 from the 2023 Neco Commerce examination.
A company has 1 000 000 shares outstanding, a current market price of (45) Naira per share, and pays an annual dividend of (3) Naira per share. Its earnings per share (EPS) for the last year were (6) Naira. The company announces a 1‑for‑5 rights issue at a subscription price of (30) Naira per share. After the rights issue, the dividend is expected to increase by 10 % and total earnings are projected to rise by 8 %. Assuming the price‑earnings (P/E) ratio remains unchanged, what will be the new market price per share after the rights issue? Give your answer in Naira to one decimal place.
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About This Question
This is Neco 2023 Commerce Question 29. It is one of the objective questions from the 2023 Neco Commerce examination.
Difficulty level: Hard .
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