Neco 2025 Commerce Question 30

Practice objective / multiple choice question 30 from the 2025 Neco Commerce examination.

Neco 2025 Commerce Objective / Multiple Choice Hard Difficulty
Question 30 NECO • 2025 • COMMERCE • objective

A company's shares are currently trading at \(1,200\) naira per share. The company announces a 1‑for‑5 rights issue at a subscription price of \(800\) naira per share. The earnings per share (EPS) is \(90\) naira and the dividend per share is \(30\) naira. After the rights issue, the dividend is expected to increase by \(10\%\) and the EPS by \(8\%\). Assuming the market price adjusts immediately to the theoretical ex‑rights price (TERP), calculate (i) the new price‑earnings ratio (P/E) and (ii) the dividend yield after the rights issue. Give your answers to two decimal places.

Answer Options

A. P\/E = 14.00; Dividend yield = 2.43%
B. P\/E = 12.35; Dividend yield = 2.75%
C. P\/E = 11.45; Dividend yield = 2.91%
Correct Answer D. P/E = 11.66; Dividend yield = 2.91%
Correct Answer
D
Correct Option:
P/E = 11.66; Dividend yield = 2.91%

About This Question

This is Neco 2025 Commerce Question 30. It is one of the objective questions from the 2025 Neco Commerce examination.

Difficulty level: Hard .

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