15million shares trading at 7.50. By raising additional equity capital via a 1 for 4 rights issue at 6.20 per share or by cutting the final dividend payable to shareholders.

Calculate the change in wealth and level of control of a shareholder who owns 300,000 shares in the company and who sells their nil-paid rights after the share price has fallen to the theoretical ex-rights price. Recalculate the change in wealth and level of control if the shareholder was to take up their rights and the share price remained unchanged at 7.50.