Question: Hi, how do you solve this question? Could you also explain how to arrive at the answer in detail? Thank you :) 4. You have
Hi, how do you solve this question? Could you also explain how to arrive at the answer in detail? Thank you :)

4. You have been asked for advice on a rights issue by a rm with 10 million shares outstanding trading a $50 per share. The rm needs to raise 100 million in new equity. If the subscription price is $20 per share, which of the following are the terms of the equity raising: a. subscription ratio=1 :10, ex rights price=$47 per share; value per right= $27 b. subscription ratio=1 :5, ex rights price=$45 per share; value per right= $25 0. subscription ratio=1 :5, ex rights price=$45 per share; value per right= $30 (1. subscription ratio=2:5, ex rights price=$20 per share; value per right= $40 e. None of the above
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