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GNBD makes a rights issue at a subscription price of $10 a share. One new share can be purchased for every 4 shares held. Before
GNBD makes a rights issue at a subscription price of $10 a share. One new share can be purchased for every 4 shares held. Before the issue there were 10 million share outstanding, and the share price was $12.
a. What is the total amount of new money raised?
b. What is the expected stock price after the rights are issued?
c. What is the value of a right?
(If you're using Excel for providing your answer, you MUST show all the process of deriving the answers.thank you!)
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