ABC plc. is proposing a rights offering. Currently there are 400,000 shares outstanding at 180 each. There
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Question:
ABC plc. is proposing a rights offering. Currently there are 400,000 shares outstanding at £180 each. There will be 70,000 new shares offered at £150 each.
Required:
(i) What is the new market value of the company?
(ii) How many rights are associated with one of the new shares?
(iii) What is the ex-rights price?
(iv) What is the value of a right?
(v) Ignoring regulations, why might a company have a rights offering rather than a general cash offer?
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Auditing and Assurance Services Understanding the Integrated Audit
ISBN: 978-0471726340
1st edition
Authors: Karen L. Hooks
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