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.

i) Calculate the price of a right.

ii ) Calculate the theoretical ex-rights share price.

iii ) Explain why an actual ex-rights share price may differ from the calculated theoretical price. ** please show working **