Associated Breweries is planning to market unleaded beer. To finance the venture it proposes to make a rights issue at $10 of one new share for each two shares held. (The company currently has outstanding 100,000 shares priced at $40 a share.) Assuming that the new money is invested to earn a fair return, give values for the following:

a. Number of new shares.

b. Amount of new investment.

c. Total value of company after issue.

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d. Total number of shares after issue.

e. Stock price after the issue.

f. Price of the right to buy one new share.

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