Awesome Bhd wants to raise RM$5$ million in new equity through rights offering. Currently

its share price is RM$10$ per share and the corporation has $1$ million share outstanding. The

subscription price is half the current share price.

i$)$ How many new shares Awesome Bhd must issue?

$(2$ marks$)$

ii$)$ Assuming you own $10,000$ ordinary shares in Awesome Bhd$.$ If you receive the

rights offering, how many of the new shares can you purchase?

$(2$ marks$)$

iii$)$ What is the share price after the rights offering?

$(4$ marks$)$

iv$)$ What is the value of one right?

$(3$ marks$)$

v$)$ Calculate your total investment in Awesome Bhd after the rights offering.

Demonstrate the effect on the economic wellbeing of your investment before and

after the rights offering.

$(5$ marks$)$

Explain THREE $(3)$ distinguishing characteristics between stocks and bonds.Awesome Bhd wants to raise RM$5$ million in new equity through rights offering. Currently its share price is RM$10$ per share and the corporation has $1$ million share outstanding. The subscription price is half the current share price.

i$)$ How many new shares Awesome Bhd must issue?

$(2$ marks$)$

ii$)$ Assuming you own $10,000$ ordinary shares in Awesome Bhd$.$ If you receive the rights offering, how many of the new shares can you purchase?

iii$)$ What is the share price after the rights offering?

iv$)$ What is the value of one right?

$(2$ marks$)(4$ marks$)(3$ marks$)$

v$)$ Calculate your total investment in Awesome Bhd after the rights offering. Demonstrate the effect on the economic wellbeing of your investment before and after the rights offering.