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A store has 200 Mil shares in issue. And wants to raise 35million for the store. shares are quoted at 220p and the rights issue
A store has 200 Mil shares in issue. And wants to raise 35million for the store. shares are quoted at 220p and the rights issue will have to be quoted at a lower price because there is a risk that the market price will fall in the 3-week offer period. The company will issue 35million new shares at 200p per share. It will be a 1 for 4 issue deal, that means for every 4 old shares the owner will get one new share. With this information calculate the post issue price of the shares and the value of a right.
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