Associated Breweries is planning to market alcohol-free beer. To finance the venture it proposes to make a rights issue at $22 of one new share for each seven shares held. (The company currently has outstanding 140,000 shares priced at $28 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

(Do not round intermediate calculations. Round your answers to 2 decimal places.)

e. Stock price after issue $

f. The rights issue will give the shareholder the opportunity to buy one new share for less than the market price. What is the value of this opportunity?

Opportunity value $