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EconoCool Corporation currently has outstanding 200,000 shares priced at $50 a share. A new generation of innovative cooling appliances is planned to be introduced in
EconoCool Corporation currently has outstanding 200,000 shares priced at $50 a share. A new generation of innovative cooling appliances is planned to be introduced in the market. The CFO proposes to make a rights issue at $15 of one new share for each two shares held, to finance this venture.
Assuming that the new money is invested to earn a fair return, give values for the following:
Q 3.1 Number of new shares.
Q 3.2 Amount of new investment.
Q 3.3 Total value of company after issue.
Q 3.4 Total number of shares after issue.
Q 3.5 Stock price after the issue.
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