QUESTION 1 30 MARKS Megan and Ray Limited (hereafter referred to "Megan and Ray" or "the company") is a major construction company that has most of its operations in the Southern Africa, in fact its corporate office is in Sandton, in Gauteng province, South Africa. The company is listed on the JSE. It is one of the biggest companies in the construction sector in South Africa. In fact, it's JSE's sector market capitalisation is currently estimated at 25%. The company has been doing relatively well despite the recent global economic hardships which have negatively affected this sector and now the Covid-19 pandemic is also exacerbating the problem. Recently, the company acquired rights to build 3 bridges at some of the major highways in Southern Mozambique. This business venture is surely a good opportunity for the company to continue to do relatively well and survive the aforementioned economic problems. The company's management proposes to finance the new operation through a rights issue of ordinary shares. At present, the company is financed by a combination of ordinary share capital, non-redeemable preference shares and redeemable debentures. An extract from the company's financial statements at 30 June 2020 is as follows