How to solve Test your understanding 9?

Test your understanding 9 (Objective test question) Audrey Co needs to raise $4 million to invest in a new project. The company has asked investors for tender offers and the following offers have been received: Maximum price offered ($ per share) No. of shares requested at 1.00 this price (million) 4.2 1.10 3.7 1.20 2.2 1.30 1.2 At what price would the strike price be set, and how much finance would be raised in total? A Strike price: $1.00, Total funds raised $4.20 million B Strike price: $1.10, Total funds raised $4.07 million C Strike price: $1.20, Total funds raised $4.08 million D Strike price: $1.20, Total funds raised $4.20 million Test your understanding 10 (Objective test question) Maximo Co has some $1, 8% preference shares in issue. The shares are currently trading at $1.10. The preference shares are redeemable at a 4% premium in three years' time, or alternatively they will be convertible into two ordinary shares on that date. Maximo Co's ordinary shares have a nominal value of $0.25 and they are trading at $0.48. The ordinary share values have grown at 3% per year in