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Stock market calculators · Theoretical ex-rights price and ownership

Rights Issue Calculator

Created by Arunangshu DasReviewed

Calculate theoretical ex-rights price and compare subscription cash, equity and relative ownership under one fully issued offer.

Enter one pro rata offer in one currency. Choose the percentage of your theoretical entitlement to take up.

Position, new-for-old offer and take-up

Use one security and consistent units. The model assumes all offered shares are issued, regardless of your own take-up.

Formatting only. Enter major currency units, including pounds for GBP.

Enter the eligible opening holding you want to model.

Use a positive reference price that still includes the rights.

Enter the amount paid per new share. Enter zero explicitly if applicable.

For one new share for four held, enter 1 here.

For one new share for four held, enter 4 here.

Enter 0 to 100. Enter 40 for 40% of your pro rata entitlement.

Theoretical fully issued comparison

Enter your position, offer and take-up, or load the worked example.

TERP and signed price gaps are theoretical. Actual trading prices, eligibility and settlement depend on the offer and market.

Shares and prices use up to 12 significant figures. Relative dilution measures the reduction in your prior ownership proportion. It does not show an absolute change in issuer ownership percentage points.

Understand TERP and relative dilution

Compare full, partial and zero take-up using the same reference quote and issuer share count.

Read the complete Rights Issue guide

Formula and methodology

TERP = (O × P + N × S) / (O + N)
Entitlement = Q × N / O
Subscription cash = entitlement × F / 100 × S.

TERP weights the reference and subscription prices by O and N. The entitlement is Q × N/O. Multiply it by F/100 to obtain subscribed shares, then multiply by S for subscription cash. Post-issue equity is post-issue shares times TERP. Subtract subscription cash once for the net comparison. Relative ownership retained is 100 × (O + N × F/100)/(O + N).

Definitions

N new shares are offered per O old shares. Q is opening shares, P is the cum-rights reference price per old share and S is the cash subscription price per new share. F is the percentage of your pro rata entitlement you model taking up.

Verified worked examples

For 100 shares at 10, with 1 new share per 4 held at 6, TERP is 9.20 and the entitlement is 25 shares. At 40% take-up, 10 new shares cost 60. The 110-share position is worth 1,012 at TERP, or 952 net of cash. The modeled change is −48, and relative ownership dilution is 12%.

Interpretation

Compare equity and cash on the same fully issued basis. Full take-up preserves the prior ownership proportion and the modeled value net of cash. A lower price per share does not by itself describe ownership dilution. The signed price gaps use different share units, and neither is an executable quote.

Inputs and interpretation

Enter the eligible opening holding you want to model, a positive cum-rights price, subscription price, and the new-for-old offer terms. Enter take-up explicitly from 0 to 100%. Review the cash, share and relative ownership results separately.

Assumptions and limitations

The issuer adds all offered shares and receives all subscription cash. This assumption holds even if this shareholder subscribes for less. The model does not identify who fills the remaining offer or infer how a premium-priced offer could be filled.

Supported domain and common mistakes

Positive shares and cum-rights price and nonnegative subscription price are bounded at 1e9. Ratio terms are integers from 1 to 1,000,000. Decimal inputs allow 12 fractional places and 48 trimmed characters. Exact scaled integer ratios preserve signed gaps before 100-significant-digit conversion. Displayed shares and prices use up to 12 significant figures.

Do not use an already ex-rights reference quote, invert the offer terms, treat a premium gap as a negative traded rights quote, or compare equity without accounting for the subscription cash. Match currency and share units before entering prices.

Frequently asked questions

How is theoretical ex-rights price calculated?
Weight the old reference price and the subscription price using the old and new ratio terms, then divide by the sum of those terms. This assumes the full offer is issued.
Which ratio number goes first?
Enter the new shares first. For one new share for every four held, enter 1 as new and 4 as old.
What does a 40% take-up mean?
It means subscribing for 40% of your theoretical pro rata entitlement. For an entitlement of 25 shares, it models buying 10.
Does full take-up prevent modeled dilution?
Yes. With a fully issued pro rata offer, taking up the full entitlement grows the holding by the same proportion as the issuer share count.
What happens when the subscription price is above the reference price?
Under the full-issue assumption, TERP lies between those prices. The two signed gaps can be negative. The calculation does not assume anyone can trade a right at that amount.
Does the tool know my actual entitlement or rights sale proceeds?
No. Fractional results are theoretical. Consult the offer and account terms for eligibility, rounding, transferability and actual proceeds.
Does the market setting change the calculation?
It changes formatting only. Enter consistent major-currency prices, including pounds rather than pence for GBP.

Sources and educational scope

Educational full-issue model. It does not infer actual allotment, broker rounding, transferability, sales, market prices, taxes, FX, fees, dates or eligibility. It does not recommend subscribing or selling.

Reviewed . AI-assisted content under operator editorial responsibility; no independent expert financial review is claimed.

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