There is of course no formula to determine the fall on the...

There is of course no formula to determine the fall on the announcement date (e.g from 4.5c). This almost always happens, and IMO is often due to the short term traders getting out and also those who are not interested in forking out extra cash for RI.

I was only referring to ex-right SP drop and it is amazing how many people are bewildered by this when it happens. 6:5 is a relatively small drop, try something like a fall during at 8:1 issue. All kinds of theories start going around except the correct one.

Also, most comments about post and pre issue capital are correct, the net asset backing (NAB) only drops if the new shares are issued at a discount to the current SP. Conversely NAB goes up when shares are issued at a premium.

Lets say company has $1,000,000 cash and nothing else, and has 10000 shares on issue. Each share is worth $100.

The company issues another 10000 shares for $100 each - this results in no change to share value.

However if the same company issues 10000 shares for $80 each, the share post issue is now worth $90 as it has post-issue 20000 shares and $1,800,000 in the bank, e.g. $90=$1800000/20000.