Neco 2025 Commerce Question 15

Practice objective / multiple choice question 15 from the 2025 Neco Commerce examination.

Neco 2025 Commerce Objective / Multiple Choice Hard Difficulty
Question 15 NECO • 2025 • COMMERCE • objective

A company has 1,000,000 shares trading at \(\text{₦}250\) each. It announces a 1‑for‑5 rights issue at a subscription price of \(\text{₦}180\) per new share. The annual dividend before the rights issue is \(\text{₦}30\) per share.\n(a) Compute the theoretical ex‑rights price per share after the rights issue.\n(b) Determine the dividend yield (percentage) based on the ex‑rights price.\n(c) An investor holds 200 shares before the rights issue and fully subscribes to his rights. What is his total amount invested in those shares after the rights issue and his average cost per share?

Answer Options

A. a) ₦242.00 per share; b) 12.40%; c) total investment ₦58,000 and average cost ₦242.00 per share
B. a) ₦240.00 per share; b) 12.50%; c) total investment ₦57,600 and average cost ₦240.00 per share
Correct Answer C. a) ₦238.33 per share; b) 12.59%; c) total investment ₦57,200 and average cost ₦238.33 per share
D. a) ₦235.00 per share; b) 12.77%; c) total investment ₦56,800 and average cost ₦235.00 per share
Correct Answer
C
Correct Option:
a) ₦238.33 per share; b) 12.59%; c) total investment ₦57,200 and average cost ₦238.33 per share

About This Question

This is Neco 2025 Commerce Question 15. It is one of the objective questions from the 2025 Neco Commerce examination.

Difficulty level: Hard .

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