Please answer all question with working and calculation. Tq

Questions Leeward Co is proposing to raise additional equity finance by means of a rights issue. There are currently om shares in issue with a par value of 50 cents (50.50) trading at $1.50 ex.div per share. The company will offer a share for every 5 shares already held at a 20% discount on the current market price. Issue costs can be ignored. Required: (a) Calculate the theoretical ex-rights price (TERP) and the value of each right. (5 marks) (b) Describe the alternative actions an existing shareholder has in connection with the rights issue and for each, determine the effect on the wealth of the investor. Advise accordingly. (12 marks) (c) The CEO of Leeward Co has suggested that it may prove more cost effective to raise the additional finance by restricting dividend payments. He believes shareholders will understand that if funds are reinvested by the company, this will lead to an overall increase in shareholder wealth. For the last 5 years, the company has maintained a steady rate of dividends out of improving levels of profits and positive cash flow. Required: With reference to underpinning theory, critically evaluate the statement made by the CEO. (8 marks) (Total = 25 marks)