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Associated Breweries is planning to market alcohol-free beer. To finance the venture, it proposes to make a rights issue at $14 of one new share

Associated Breweries is planning to market alcohol-free beer. To finance the venture, it proposes to make a rights issue at $14 of one new share for each six shares held. (The company currently has outstanding 60,000 shares priced at $42 a share.) Assuming that the new money is invested to earn a fair return, give values for the following:

a. Number of new shares
b. Amount of new investment
c. Total value of company after issue
d. Total number of shares after issue
e. Stock price after issue

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