alleryStart learning →A company has 100 million shares and makes a 1:1 rights issue fully taken up. If the cash is idle, EPS will do what?
ARise by a quarter
BIncrease twofold
CStay unchanged
DBe cut in half
Answer & Solution
Correct answer: D. Be cut in half
Shares double while earnings are unchanged, so earnings per share are cut by half.
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