Theoretical ex-rights price
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Theoretical ex-rights price (TERP) is a calculated price for a company's stock shares after issuing new rights-shares with the assumption that all these newly issued shares are taken up by the existing shareholders. The consequence would be that the price will be lower than the old shares but higher than the new issued shares.
If there is 1 new share at 800 pence (p) and 4 old shares at 1000p each, than value for the 5 shares would be 4800 so that one of the "mixed" shares would be at 960p.
- "Theoretical Ex-Rights Price". investopedia.com. Retrieved 2008-03-02.
- "Chief Examiner's Report, Global Operations Management, Diploma Winter 2006". Securities and Investment Institute. 2006. Retrieved 2008-03-02. See page 2.
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