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ABC Ltd. is a listed company with shares currently trading at $10.40. The company announces a 3 for 10 renounceable rights issue with a subscription

ABC Ltd. is a listed company with shares currently trading at $10.40. The company announces a 3 for 10 renounceable rights issue with a subscription price of $9.10.

(a) Rob is an investor who owns 1000 shares in ABC Ltd. What choices are available to Rob given that he owns shares in this company conducting the rights issue.

(b) Calculate the theoretical ex-rights share price of ABC Ltd.

(c) Calculate the value of the right.

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