(a) Lexbel plc generates earnings after tax (PAT) of 20 per cent on shareholders' funds. Its current capital structure is as follows Ordinary shares of 50p each 300,000 Reserves 400000 The board of Lexbel plc wishes to raise 180,000 from a right issue in order to expand existing operations. Its return on shareholders' funds will be unchanged. The current ex-dividend market price of Lexbel plc is 1.90. Three different rights issue prices have been suggested by the finance director: 1.80, 1.60 and 1.40. (a) Determine the 1. num ber of shares to be i ssued ii. theoretical ex-rights price, i. expected earnings per share and iv. form of the issue for each rights issue price, and v. Present your results in a tabular form and critically evaluate the best option among the three 11 right issues