- TERP is the theoretical market price of the share after the completion of the rights offering.
- New rights issues lead to an increase in the number of shares available and therefore affect the price of the underlying share.
- Typically, a share offering gives shareholders the opportunity to buy more shares at a reduced price, causing a dilution effect.
- As a general rule, TERP will be lower than the pre-float market price immediately after the rights issue period.