13 Rights issue. Hoseknit Clothing has 9 million £1 ordinary shares in issue. The shares are currently trading in the stock market at £3.75. The directors wish to raise a further £4.5 million for expansion and a ‘one-for-six’ offer is proposed. The company’s advisers have indicated that an issue price of £3.00 would be appropriate.

You are required to calculate:

(a) the theoretical ex-rights price of a share;

(b) the shareholding value after the rights issue;

(c) the value of the right to buy another share;

(d) the value of a right per individual share.