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Investment advice and corporate finance
Module 12Investment Management and Corporate FinanceA share trades at RM3.00 before a 1-for-2 bonus issue. What is its theoretical ex-bonus price?
A 1-for-2 bonus gives one free share for every two held, so two shares become three with the same total value: 2 × 3.00 ÷ 3 = RM2.00. RM1.50 halves the price as if it were a 1-for-1 bonus. RM2.50 deducts only half a share's worth. RM3.00 assumes no adjustment. Source: SIDC Module 7 Study Outline (Jul-Dec 2026) Topic 5 Equity Markets; Bodie, Kane and Marcus, Investments, chapters on equity valuation (as at October 2026).
Reading 1-for-2 as a 1-for-1 issue.
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