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ABC Ltd. is a listed company with shares currently trading at $4.80. The company announces a 2 for 5 renounceable rights issue with a subscription

ABC Ltd. is a listed company with shares currently trading at $4.80. The company announces a 2 for 5 renounceable rights issue with a subscription price of $4.60.

What is a rights issue and what does it mean when a rights issue is renounceable?

Calculate the theoretical ex-rights share price

Calculate the value of the right

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