RG pic has decided to undertake a rights issue to raise 150 million. The company's shares...

 

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RG pic has decided to undertake a rights issue to raise £150 million. The company's shares are trading at £3.00 and it is proposed to make the rights issue at a discount of 25 per cent to this price. The company has 200 million shares outstanding. Following the proposed rights offering the company is expected to report net income of £30 million per annum for the foreseeable future. The rights are traded in the market. One week after the announcement of the terms of the issue the share price has fallen to £2.50. Determine the expected value of the theoretical ex- rights price at the end of the first week. Select one: O a. £2.24 O b. £2.14 O c £2.44 O d. £2.34 RG pic has decided to undertake a rights issue to raise £150 million. The company's shares are trading at £3.00 and it is proposed to make the rights issue at a discount of 25 per cent to this price. The company has 200 million shares outstanding. Following the proposed rights offering the company is expected to report net income of £30 million per annum for the foreseeable future. The rights are traded in the market. One week after the announcement of the terms of the issue the share price has fallen to £2.50. Determine the expected value of the theoretical ex- rights price at the end of the first week. Select one: O a. £2.24 O b. £2.14 O c £2.44 O d. £2.34

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