A stock closes at ₹880, ₹900 (last cum-rights day), then ₹845 and ₹860. A 1:5 rights issue at ₹600 went ex on the third day. Compute the TERP, the adjustment factor, the adjusted series, and the adjusted ex-day return. Verify that the ex-day adjusted return equals the economic return of a holder who subscribes.
M01 · Problem 13 ★★ Check
Adjusting a series for rights
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