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Alumina Limited has a share price of $2.72. The company has made a renounceable rights issue offer and the offer is a 2-for-8 pro-rata issue

Alumina Limited has a share price of $2.72. The company has made a renounceable rights issue offer and the offer is a 2-for-8 pro-rata issue of ordinary shares at $2.40 per share.

Calculate the price of a right.
Calculate the theoretical ex-rights share price.
Explain why an actual ex-rights share price may differ from the calculated theoretical price.

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