You work for ABC Berhad in the finance department. You own 300 shares in ABC Berhad, that are selling at RM20 per share on Bursa Malaysia. There are currently 20 million shares of ABC Berhad outstanding. You just found out ABC Berhad will publicly announce a new stock offering. The costs from the offering will be 10 percent of the new offering. The new offering will increase the number of outstanding share by 40 percent. The new offering is needed to raise money because the firm will be announcing some positive NPV projects when it announces the new offering. 

Once the public finds out about the new offering, interpret the expected impact on the value of your shareholdings?

Answer rating: 100% (QA)

When the public finds out about the new stock offering by ABC Berhad there are a few factors to cons... View the full answer