If, before the capitalisation issue, Airtours’ ordinary shares were trading at £12.35, an increase of 406 per cent in the share’s market value over six years, you are required to:

(a) Calculate the estimated after issue share price.

(b) State if this issue should affect the aggregate value of each shareholder’s investment in the company.

(c) State what you think were the reasons for Airtour’s management making this issue