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(a) Corp. Finance Inc. is proposing a rights offering. Presently there are 560,000 shares outstanding at RM20 each. There will 40,000 new shares offered at

(a) Corp. Finance Inc. is proposing a rights offering. Presently there are 560,000 shares outstanding at RM20 each. There will 40,000 new shares offered at RM15 each. Calculate the following: (v) Total flotation cost. Given the flotation cost is 7 percent.

(b) Discuss FOUR (4) problems that may be met in using the CAPM in investment appraisal.

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