Smith plc an all equity financed business currently has 20 million shares of 0.50£ each. These are quoted at £4.50 each. The business is about to announce a three for ten rights issue at £3.20 each. What will be the theoretical value of the right to buy one of the new shares?

Answer rating: 100% (QA)

ANSW ER It is important to note that companies often issue rights to buy more stock if they need cap... View the full answer