Nealofar Berhad plans to raise RM500 million from a rights issue that will mainly be used to fund a new business segment. Nealofar will issue 50 million new shares, at a subscription price of RM10 per share. 80 percent of the proceed from the rights offering will be used to develop a new environmentally friendly factory., while rest will used for working capital and equipment lease payments. Nealofars shares are currently trading at RM40 each. Company recorded an income after tax charge of RM40 million.

Below is the partial equity account of Nealofar Berhad.

Partial Equity Account for Nealofar Berhad (RM)

Common Stock @ RM1 800,000,000

Premium 50,000,000

Preferred Stock 200,000,000

Retained Earnings 400,000,000

Total Equity 1,450,000,000

1. What is the number of rights needed to purchase one (1) new share?

2. The ex-rights price of the stock

3. The ex-rights value

4. How much is the total common stock value?

5. How much is the total premium value?

6. How much is the total shareholders equity?