Associated Breweries is planning to market unleaded beer. To finance the venture, it proposes to make a rights issue with a subscription price of $10. One new share can be purchased for each four shares held. The company currently has outstanding 100,000 shares priced at $40 a share. Assuming that the new money is invested to earn a fair return (80% subscription), what is the share price after the right issue?

• A. $33.33
• B. $40
• C. $35
• D. $42