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Esper Ltd is attempting a $20m equity capital through a 1-for-9 rights issue. There are currently 90m shares outstanding. Esper Ltd's cum-rights price is $4.50.

Esper Ltd is attempting a $20m equity capital through a 1-for-9 rights issue. There are currently 90m shares outstanding. Esper Ltd's cum-rights price is $4.50. (a) What is the issue price? (b) Joe Dude is currently a shareholder. How many shares must Joe hold to subscribe to a new share? (c) What is the value of the right to one new share? (d) What is the theoretical ex-right price?

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