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[sharechat] Kiwi Income Rights

From:	"Peter Riches" <peter@kairos.ws>
Date:	Thu, 4 Jul 2002 12:44:07 +1200

Greetings share-chatters

Can anyone explain the maths involved in the current KIP rights issue:

1 rights issue for every 6 units held

Subscription price = 82 cents

Rights are trading at about 6.5 cents

Head share is trading at 96 cents

Why are the rights trading at 6.5 cents - does this imply that the market expects the ordinary unit price to drop to around 89 cents once the rights cease trading? Is this a premium or discount to the theoretical price?

Thanks in advance

Peter

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