Right Issue of share

Value of right may be calculated as :-

(Proportion of Right Shares / Total Proportion of Shares) * (Right market price of each share - Right issue price per share)                                                                                                                                                                               

Example: A company offered to its shareholders the right to buy one share of Rs. 100 at a price of Rs. 150 each for every three share of Rs. 100 each held. The market value of each share was Rs. 200. 

Proportion of Right Share is 1 against every 3 shares held OR 1 Right Share out of 4 (total) shares

Therefore, Value of Right = (1/4) * (Rs. 200 - Rs. 150) = Rs. 12.50