Klutz Publishers Ltd has announced a rights offer to raise R80 million for a new journal, the Journal of Financial Excess. The shares currently sell for R40 per share, and there are 5.2 million shares in issue. (a) What is the maximum and minimum possible subscription price? (b) If the subscription price is set at R35 per share, how many shares must be sold? How many rights will it take to buy one new share? (c) What is the ex-rights price? What is the value of a right? (d) Show how a shareholder with 1000 shares before the offering and no desire to buy additional shares is not harmed by the rights offer. (e) Why might a rights offering be preferable than a general cash offer?