Question 2 (25 marks) Caf de Coral Group is one of Asia's largest publicly listed restaurant and catering groups operating quick service restaurants, casual dining chains and institutional catering, with over 450 outlets in Hong Kong and the Mainland China. The Group is also a major operator in food processing business with 4 ISO-certified plants in Hong Kong and Mainland China. The Group was incorporated in October 1968 and was listed on the Hong Kong Stock Exchange in July 1986, which was the first local catering group which went public. Over the past 50 years, the Group substantially established its position as the market leader in the fast food industry. Deep-rooted in Hong Kong, the Group put great emphasis on sustainable development, and has been selected as a constituent member of the Hang Seng Corporate Sustainability Benchmark Index since 2015. Caf de Coral Group is proposing a rights offering. Currently, there are 500,000 shares outstanding at $81 each. There will be 60,000 new shares offered at $70 each. Required: (a) Compute the new market value of the firm. (5 marks) (b) Calculate the number of rights associated with one of the new shares. (5 marks) (c) Advise the ex-rights price. (5 marks) (d) Work out the value of a right. (4 marks) (e) Justify with reasons for a company to issue rights instead of share offering. (6 marks)