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In 2013, ABC Mining announced rights issue to build up more capital. The firm wants to use the rights offering to issue $7 a share
In 2013, ABC Mining announced rights issue to build up more capital. The firm wants to use the rights offering to issue $7 a share for every five shares held. Before the rights issues there were 10 million shares outstanding and the share price was $10. (Suppose 100% subscription for the rights offering).
a. What was the total amount of new money raised
b. What was the value of the right to buy one new share
c. What was the prospective stock price after the issue
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