3 Hanging Valley plc has issued share price of 2m ordinary shares, nominal value 1. The board of the company has decided it needs to raise 1m, net of issue costs, to finance a new product. It has been suggested that additional finance raised by means of a 1 for 4 rights issue. The issue price will be at a 20 per cent discount to the current market price of 2.75 and issue costs are expected to be 50,000. Required: Calculate and explain the following: (a). the theoretical ex-rights price per share; (b). the net cash raised; (c). the value of the rights. (12 marks) (d). critically discuss the advantages and disadvantages of rights issue. (13 marks)