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AllStarsLtd has announced arenounceablerights offering to obtain $28 million of equity financing. The subscription price is set at $7 per share. The shares currently sell

AllStarsLtd has announced arenounceablerights offering to obtain $28 million of equity financing. The subscription price is set at $7 per share. The shares currently sell for $9 per share and there are 20 million shares outstanding.

How many shares are required to buy one new share?
What is the value of the right?
What is the ex-rights share price?
If you hold shares inAllStars, will you gain or lose by the rights issue? Support your answer with calculations.

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