Assuming 1 for 2 nil paid rights issue at 10% discount at $0.90 and nil paid rights can be sold at $0.02 in the stock market to reduce holding costs and stock can be purchased at $1.EPS at $0.1 at 100% payout for DPS at $0.1 so the dividend yield at $1 purchase price = 10% ROC
Here is the Maths.
No point guessing or debating. See the Maths. See the truth for yourself. Dilutive or not?
Investor A
Investor A has 10,000 shares but has decided not to subscribe for his entittled 5,000 nil paid rights issues. He then sold them at $0.02 and collected $100 as profit. After the sales of his entitled 5,000nil paid rights, his invested capital for holding 10,000 shares has dropped to $9,900 as he used his $100 profit as cost reduction for holding 10,000 shares.
Investor B
Investor B has 10,000 ......