The rate of return under re-capitalization: A note

• Main Authors: ARIFF, Mohamed, Kian Guan LIM
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1988
• Subjects: Corporations; Finance; Recapitalization; rate of return; capital investments; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4982; https://ink.library.smu.edu.sg/context/lkcsb_research/article/5981/viewcontent/9400227.pdf
• Institution: Singapore Management University

The article discusses issues related to variations in rate of return of stocks under re-capitalization. Share returns are commonly adjusted for re-capitalization by distributing the difference between market and exercise prices over the number of shares. Re-capitalization is said to occur when the total amount of equity capital or number of shares in a firm changes. New issues usually take the form of bonus issues or new paid-up issues called rights issues, which do not change the amount of equity.