Mike owns 4,000 shares in County Ltd, whose current share price (cum rights) is trading at $4.30 per share. County Ltd has been making large profits and wishes to distribute more dividends out to their loyal shareholders. However, they dont want to change to current dividend payout (amount). They then consider making a share 3 for 4 rights issue with a subscription price of $3.50 per share. Mike wishes to calculate:

a) The value, R of the right to buy 1 new share

b) The ex-rights share price, X

c) The value of his investment cumulative rights and ex-rights