For the same firm in Question 14, you have been approached by a major shareholder who has asked you to consider either an underwritten cash offer or a rights issue

(not underwritten) to current shareholders. The shareholder has insisted you maximize shareholder wealth. What is your decision? Explain.

Question 14,

For the same firm in Question 14, you have been asked by a reporter why you are having a seasoned equity offering when typically share prices drop when they are announced. How would you explain the price drop?