9. Pinder Ltd has 15 million shares outstanding, with a current share price of $18.55 each. Pinder Ltd then issue a 2-for-15 renounceable rights issue with a subscription price of $10 per share. Which of the following statement is correct in relation to the rights issue?

Group of answer choices

More than one of the other statements is correct.

If the shareholders of the firm choose to do nothing, their wealth will remain the same.

None of the other statements is correct.

The theoretical share price on the ex-right date is $11.01.

The shareholders of the firm can choose to sell the right to buy 1 new share in the exchange for $7.54.

Question 10

Which of the following statements best describes the similarities and differences between private placements and rights issues?

Group of answer choices

More than one of the other statements is correct.

There is a limit on how much funds an Australian company can raise in a year via both private placements and rights issues.

None of the other statements is correct.

A prospectus is required in a rights issue but not in a private placement.

A rights issue is more appropriate than a private placement if the funds need to be raised quickly.