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Wednesday, 04/13/2011 1:35:06 PM

Wednesday, April 13, 2011 1:35:06 PM

Post# of 107
Re: pps question. PPS and rights issues proportional relations.. 12-Apr-11 10:30 pm
"The subscription price is $10 per share. Each right entitles you to purchase 1.3081 shares of CPF at $10 per share. CPF closed today at $19.07 per share, so 1.3081 shares would be worth $24.95, but it would only cost you $13.08 because you exercised your rights to a purchase it at a bargain price. Thus, the intrinsic value of one right is 24.95 minus 13.08 subscription price paid equals $11.87. The rights closed today at $9.70 so they are trading at less than intrinsic value. See the free stock rights calculator at www.costbasis.com for help with your cost basis calculations. "
source: costbasis.com
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