Funding required = 40 million Current market price Po = 2 Discount d= 20% S Ps =

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Funding required = 40 million Current market price

Po = 2 Discount

d= 20% S

Ps = 2 (1- 0.2)= 1.60

Px = 1.92

Outstanding Shares N= 100 million

Explain the impact on the value of the right if the issue is undertaken on the specified terms and the share (cum-rights) price falls to 1.8 shortly after the shareholders are invited to subscribe to the new issue.

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0470161012

9th Canadian Edition, Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.

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Posted Date: Apr 07, 2024 08:04 AM

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Funding required = 40 million Current market price Po = 2 Discount d= 20% S Ps =

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Intermediate Accounting

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