Right Share Adjustment Calculator
Welcome to psuraj.com.np's Right Share Adjustment Calculator, your essential tool for understanding how a right share issue impacts the market price of your shares. Whether you're an experienced investor or new to the Nepali stock market, this calculator simplifies the complex process of price adjustment, helping you make informed decisions.
What is a Right Share Adjustment Calculator?
A Right Share Adjustment Calculator is a tool that helps investors determine the theoretical adjusted market price of a share after a company issues right shares. When a company issues right shares, it offers existing shareholders the opportunity to buy new shares, usually at a discounted price, in proportion to their existing holdings. This process changes the total number of shares in the market and impacts the per-share market price. Our calculator takes into account the pre-right share market price, the percentage of right shares issued, and the paid-up value (par value) of the shares to give you the adjusted price.
Why is Right Share Adjustment Important?
- Accurate Valuation: It helps investors determine the true value of their holdings after a right issue, preventing misinterpretation of price movements.
- Informed Trading: Knowing the adjusted price allows investors to make better buying or selling decisions post-right issue.
- Capital Management: It helps in assessing the impact on your investment portfolio and planning for further investments or divestments.
How to Use Our Right Share Adjustment Calculator
Using our calculator is straightforward. Simply input the following details:
- Market Price (Before Book Closure): The closing market price of the share on the day before the book closure date for the right issue.
- Percentage of Right Share: The ratio of right shares being issued (e.g., 100% means 1 new share for every existing share).
- Paid-up Value per Share (Par Value): The face value of the share, typically Rs. 100 in Nepal.
Click "Calculate" and our tool will instantly display the adjusted market price.
People Also Ask:
What is the meaning of share adjustment?
Share adjustment, in the context of right shares, refers to the change in the market price of a company's stock after a right issue. When a company offers right shares, it essentially increases the total number of shares outstanding. Since these new shares are often offered at a price lower than the current market price, the overall average cost per share for existing shareholders decreases. Consequently, the market price of the share is adjusted downwards on the ex-right date to reflect this increase in shares and the dilution of the existing price. This adjustment ensures fairness and reflects the theoretical value of the shares after the capital increase.
What is the formula for right per share?
The most common formula used in Nepal to calculate the Adjusted Price after a right share issue is:
Adjusted Price = (Market Price + (Face Value × Right Share %)) / (1 + Right Share %)- Market Price: This is the Last Traded Price (LTP) of the share before the book closure date.
- Face Value: This is the par value of the share, which is typically Rs. 100 in Nepal (the price at which right shares are usually issued).
- Right Share %: This is the percentage of right shares being issued (e.g., for a 50% right share, use 0.50 in the formula, or for a 100% right share, use 1).
This formula averages out the value of your existing shares with the new shares offered at face value, arriving at a theoretical adjusted price per share after the right issue.
What is right share with example?
A "right share" is an invitation to existing shareholders to purchase additional new shares in the company. This offer is usually at a discounted price compared to the current market price and is proportional to their current shareholding.
Example: Suppose you own 100 shares of Company A, trading at Rs. 500 per share. Company A announces a 50% right share issue at a par value of Rs. 100.
- Current holdings: 100 shares @ Rs. 500 = Rs. 50,000
- Right shares you can apply for (50% of 100): 50 shares
- Cost of right shares: 50 shares @ Rs. 100 = Rs. 5,000
After applying for and receiving the right shares, you will have 150 shares. The theoretical adjusted price per share would be calculated to reflect the new total value and increased number of shares. Our calculator helps you find this adjusted price quickly.
What is the right share in Nepal?
In Nepal, a right share (also known as "hakprad share" in Nepali) is a mechanism used by publicly listed companies to raise additional capital from their existing shareholders. The process is regulated by the Securities Board of Nepal (SEBON) and the Nepal Stock Exchange (NEPSE). When a company decides to issue right shares, it first makes an announcement and sets a "book closure date." Only shareholders who own shares on or before this book closure date are eligible to apply for the right shares. The right shares are typically offered at their par value (usually Rs. 100 in Nepal), which is often significantly lower than the market price, providing an incentive for existing shareholders to subscribe. This allows companies to raise funds without diluting the ownership percentage of existing shareholders who choose to participate.
Remember, while our Right Share Adjustment Calculator provides a theoretical adjusted price, actual market movements can be influenced by various factors. Always conduct your own research and consult with a financial advisor before making investment decisions.
Start calculating your right share adjustments today with psuraj.com.np!