Mvela Ltd has 100 000 shares in issue. The shares are currently trading at R100 per share.  Mvela needs a new factory. The factory is expected to cost R900 000. The management decided to finance the construction of the new factory using a rights issue at R 90 per share. 

Required:

Explain how this decision will affect the company's share price; Support your answer with calculations where possible.

Answer rating: 100% (QA)

SOLUTION Mvela Ltds decision to finance the construction of a new factory using a rights issue at R90 per share will have an impact on the companys share price In this answer we will discuss the impac... View the full answer