Question
Corporate Ltd has 12 million shares outstanding, with a current share price of $15.57 each. Pinder Ltd then raises additional funds by placing 0.9 million
Corporate Ltd has 12 million shares outstanding, with a current share price of $15.57 each. Pinder Ltd then raises additional funds by placing 0.9 million shares at $8.5 each to Sean Inc, an institutional investor. Which of the following statement is correct in relation to the placement?
a- Corporate Ltd share price is closest to $16.21 after the placement.
b- More than one of the other statements is correct.
c- There is a transfer of wealth from non-participating shareholders to Sean Inc by $7.65 million
d- None of the other statements is correct.
e- The ownership of non-participating shareholders is diluted after the placement
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