Question
I Need it by Hand and not with Excel since I have no idea About Excel and cannot use it on the exam. Thanks in
I Need it by Hand and not with Excel since I have no idea About Excel and cannot use it on the exam. Thanks in advance
Epple Computer Corp. (ECC) went public 8 years ago and issued 15 Million shares at a nominal value 10 per share. At present, there is a need for additional funding to further grow the company. According to the business plan, the expected return on the total capital invested in ECC is averaging at 9 %. The company could issue another bond at 8,5 % interest rate or issue new shares. a. The management of ECC suggests an increase of share capital at the Shareholders Meeting with the following specifications: (6 points) Additional number of shares to be issued: 3 Million The current share price (before share capital increase) is 110 per share. The new shares shall be issued in the stock market at a price of 95 per share. The shares shall be issued with subscription rights offered to the current shareholders. Please calculate the share price after the share capital increase and the value of a subscription right.
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