The Theoretical Ex-Rights Price (TERP) is a calculation used to determine the price of a stock after a rights issue has taken place. A rights issue is when a company offers its existing shareholders the opportunity to purchase additional shares at a discounted price. The TERP is calculated by taking the current market price of a stock and subtracting the theoretical value of the rights that have been issued.The TERP is used as a way to compare the value of a stock before and after a rights issue, and to help investors determine whether or not to participate in the rights issue. It is also used to determine the impact of the rights issue on the overall value of the stock and the company.The TERP formula is calculated by: -(Current Stock Price - Rights Issue Price + Subscription Price) / (Number of shares outstanding + Number of new shares issued)It should be noted that TERP is a theoretical price and it does not guarantee the same price as stock market prices are affected by various factors like demand and supply, market trends, and other financial and non-financial factors.