In 2012, the Pandora Box Company made a rights issue at €9 per share for one new share for every four shares held. Before the issue there were 9.4 million shares outstanding and the share price was €10.

Required:

a. What was the total amount of new money raised?

b. The rights issue gave the shareholder the opportunity to purchase a new share for less than the market price. What was the value of this opportunity per share owned?

C. What was the prospective price of the shares after issuance?

d. How far could the total value of the company fall before shareholders are unwilling to assume their rights? Now suppose the company had decided to issue the new shares at €8 instead of €9.

my. How many new shares would the company have had to sell to get the same amount of money?

F. What would be the new value of the opportunity given to shareholders to purchase a new share for less than the market price?

gram. What would be the potential price of the shares after issuance?

H. Now, how far could the total value of the company fall before shareholders are unwilling to assume their rights?

Answer rating: 100% (QA)

a To calculate the total amount of new money raised we need to first find out how many new shares were issued Since the rights issue was for one new share for every four shares held the number of new ... View the full answer