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Question 3 ABC's current share price (cum rights) is $7 per share. It announces a three for seven rights issue with a subscription price of $3 per share. The share price on the ex-rights date will always decrease to the theoretical ex-rights price of $4.00. True/False Question 4 Shark Ltd. has agreed to acquire Salmon Ltd. using a scheme of arrangement. Salmon Ltd. held an extraordinary general meeting to vote on the proposal and the meeting was attended by 521 of its shareholders who collectively owned 38 million shares. The proposal was approved by 280 of the attending shareholders who owned 29.1 million shares in the company. As a result, Shark Ltd. can automatically gain full control of Salmon Ltd. True/False Question 5 Risk management is valuable because it can reduce the probability of a firm going bankrupt. True/False