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Q1 - a) CMJ Patel Ltd has a share price of $1.95. The company has made a renounceable rights issue offer and the offer is
Q1 -
a) CMJ Patel Ltd has a share price of $1.95. The company has made a renounceable rights issue offer and the offer is a two-for-six pro-rata issue of ordinary shares at $1.65 per share.
- Explain what does it mean by the offer being renounceable and to whom is this offer made?
- Calculate the price of the right.
- Calculate the theoretical ex-rights share price.
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