Value of Right Solution

STEP 0: Pre-Calculation Summary
Formula Used
Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share
VOR = (SP-RSP)/n
This formula uses 4 Variables
Variables Used
Value of Right per Share - Value of Right per Share refers to the theoretical worth of an option or warrant, representing the difference between the current stock price and the exercise price of the option or warrant.
Stock Price - Stock Price refers to the current market value of a single share of a publicly traded company's stock.
Right Subscription Price - Right Subscription Price is the predetermined price at which existing shareholders can purchase additional shares during a rights offering.
Number of Rights to Buy a Share - Number of Rights to Buy a Share represents the ratio of rights issued to existing shareholders for purchasing additional shares during a rights offering.
STEP 1: Convert Input(s) to Base Unit
Stock Price: 38 --> No Conversion Required
Right Subscription Price: 35 --> No Conversion Required
Number of Rights to Buy a Share: 4 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
VOR = (SP-RSP)/n --> (38-35)/4
Evaluating ... ...
VOR = 0.75
STEP 3: Convert Result to Output's Unit
0.75 --> No Conversion Required
FINAL ANSWER
0.75 <-- Value of Right per Share
(Calculation completed in 00.004 seconds)

Credits

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Created by Keerthika Bathula
Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad
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Verified by Nayana Phulphagar
Institute of Chartered and Financial Analysts of India National college (ICFAI National College), HUBLI
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8 Strategic Financial Management Calculators

Value of Right using New Shares
​ Go Value of Right = Number of New Shares*(Market Price-Issue Price of New Share)/Total Number of All Shares
Value of Right
​ Go Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share
Conversion Parity Price
​ Go Conversion Parity Price = Value of Convertible Security/Conversion Ratio
Share Exchange Ratio
​ Go Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price
Earnings Yield
​ Go Earnings Yield = (Earnings per Share/Market Price per Share)*100
Dividend Yield
​ Go Dividend Yield = (Dividend per Share/Market Price per Share)*100
Dividend Rate
​ Go Dividend Rate = (Dividend per Share/Current Share Price)*100
Earnings Yield using PE Ratio
​ Go Earnings Yield = (1/Price-Earnings (PE) Ratio)*100

Value of Right Formula

Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share
VOR = (SP-RSP)/n

What is Value of Right ?

The value of a right, often encountered in financial contexts like rights offerings or corporate actions, represents the theoretical worth of the privilege granted to existing shareholders to purchase additional shares of stock at a specific price within a defined period. This value is determined by market forces and can fluctuate based on factors such as the current stock price, the exercise price of the rights, prevailing interest rates, market sentiment, and the duration until the rights expire. Typically, the value of a right is calculated as the difference between the market price of the stock and the subscription price of the rights. Investors and analysts closely monitor the value of rights as it influences the decision-making process regarding participating in rights offerings, trading rights in the secondary market, or assessing the overall attractiveness of the offering.




How to Calculate Value of Right?

Value of Right calculator uses Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share to calculate the Value of Right per Share, The Value of Right is the market-determined price representing the theoretical worth of the privilege to purchase additional shares during a rights offering. Value of Right per Share is denoted by VOR symbol.

How to calculate Value of Right using this online calculator? To use this online calculator for Value of Right, enter Stock Price (SP), Right Subscription Price (RSP) & Number of Rights to Buy a Share (n) and hit the calculate button. Here is how the Value of Right calculation can be explained with given input values -> 0.75 = (38-35)/4.

FAQ

What is Value of Right?
The Value of Right is the market-determined price representing the theoretical worth of the privilege to purchase additional shares during a rights offering and is represented as VOR = (SP-RSP)/n or Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share. Stock Price refers to the current market value of a single share of a publicly traded company's stock, Right Subscription Price is the predetermined price at which existing shareholders can purchase additional shares during a rights offering & Number of Rights to Buy a Share represents the ratio of rights issued to existing shareholders for purchasing additional shares during a rights offering.
How to calculate Value of Right?
The Value of Right is the market-determined price representing the theoretical worth of the privilege to purchase additional shares during a rights offering is calculated using Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share. To calculate Value of Right, you need Stock Price (SP), Right Subscription Price (RSP) & Number of Rights to Buy a Share (n). With our tool, you need to enter the respective value for Stock Price, Right Subscription Price & Number of Rights to Buy a Share and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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