Please EXPLAIN these!

DKR · 1 Please EXPLAIN these! Mon Jun 20, 2011 7:07 pm

DKR

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01. i. Price band

Ex : CSE 10% price band has been imposed on the following security
Company ABC.N0000 - From 1st May to 14th May
On 30th April mkt closing price Rs. 5.00

ii. What will happen before, during, and after the Price Band.

02. Right Issue

Ex : ABC company - Issue Price: Voting Rs.25/-
PROPORTION - 01 for 10
On XR day share price = Rs. 30/-

What will be the price after Right...? Plz explain the calculation ..

03. Exact Balance

Ex : If A had invested Rs. 100,000/- to buy ABC company shares. After selling shares
he earned Rs. 25,000/- . Now his balance Rs. 125,000/- (lets consider after
paying broker charges)
Then he brought XYZ company 1000 shares at Rs. 50/-. After few days shares
have gone down to Rs. 40/-. (lets consider broker charges as 1%)
i. What is the new exact balance showing on A's Protofolio ?. Please explain the calculations.

Please explain above questions. I have learned more using this FORUM as new to the mkt. I highly appreciate that. This will help every new comer who need sources.

Thank You....![code]

nkalansu · 2 Re: Please EXPLAIN these! Mon Jun 20, 2011 7:30 pm

nkalansu

Senior Manager - Equity Analytics

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Answer to question 2.

Price after rights issue = theoretical ex-rights price is...

= 25 x 1 + 30x10
------------------------------
11

= Rs. 29.54
ex rights price = (issue price x issued quantity) + (existing quantity x price
before rights )
-------------------------------------------------------------------------

(Total no of shares after rights)

Fresher · 3 Re: Please EXPLAIN these! Mon Jun 20, 2011 8:35 pm

Fresher

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01) from may 1st to may 14th (now only 5 mkt days i think) the price can't go beyond 10% more or less of the previous day's closing price.
i.e - on may 1st closing price would be in the range of 4.50-5.50. the 10% will be calculated on the closing price for the following day. When the band is lifted, there will be no such restriction for price movement

02) explained

03) if he vought 1000 @ 50 and now it is 40/- his portfolio value is 40,000/- ( (- 50,000 - 40,000) x 1.024% )
he should also have a cash balance of 75,000/- at the broker

these look like an exam paper for me. Smile

also note the colors which is 'prohibited' Wink

DKR · 4 Re: Please EXPLAIN these! Mon Jun 20, 2011 10:03 pm

DKR

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Tnx for everyone, answered my question paper....!
Sorry for the colours which i used...

DKR · 5 Please EXPLAIN this...... Mon Jun 20, 2011 10:27 pm

DKR

Senior Equity Analytic

Posts : 75
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Join date : 2011-06-11

Exact Balance

Ex : If A had invested Rs. 100,000/- to buy ABC company shares. After selling shares
he earned Rs. 25,000/- . Now his balance Rs. 125,000/- (lets consider after
paying broker charges)
Then he brought XYZ company 1000 shares at Rs. 50/-. After few days shares
have gone down to Rs. 40/-. (lets consider broker charges as 1%)

What is the new exact balance showing on A's Protofolio ?. Please explain the calculations.

I have already got one answer for this question, but i need to clear one thing.

According to cost basis, cost = 1000 * 50 * 1.01 = 50,500/-

so, new cash balance = 125,000/- - 50,500/- = 74,500/-

Is this TRUE ...? please explain...

OR cash balance calculate according to the Net Security (Equity Position). please explain...
Equity position = 1000 * 40 = 40,000/-
So, un realized lost = 1000/-

so, new cash balance = 125,000/- - (50,500 + 10,000)
= 64,500/-

please explain...

Intrinsic · 6 Re: Please EXPLAIN these! Mon Jun 20, 2011 11:12 pm

Intrinsic

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DKR wrote:Exact Balance

Ex : If A had invested Rs. 100,000/- to buy ABC company shares. After selling shares
he earned Rs. 25,000/- . Now his balance Rs. 125,000/- (lets consider after
paying broker charges)
Then he brought XYZ company 1000 shares at Rs. 50/-. After few days shares
have gone down to Rs. 40/-. (lets consider broker charges as 1%)

What is the new exact balance showing on A's Protofolio ?. Please explain the calculations.

I have already got one answer for this question, but i need to clear one thing.

According to cost basis, cost = 1000 * 50 * 1.01 = 50,500/-

so, new cash balance = 125,000/- - 50,500/- = 74,500/-

Is this TRUE ...? please explain...

OR cash balance calculate according to the Net Security (Equity Position). please explain...
Equity position = 1000 * 40 = 40,000/-
So, un realized lost = 1000/-

so, new cash balance = 125,000/- - (50,500 + 10,000)
= 64,500/-

please explain...

In your account statement, you will see a cash balance of 74,500.00.
This is calculated as per your bought & sold prices. (+/- com)

In your portfolio, you will find a figure calculated on your average bought price & current market price. This is the unrealized gain / (loss).

In this case it reflects a loss of 10,000.00, for the second transaction.