QUESTION 3 (25 MARKS)

(a) Win Corp. is proposing a rights offering. Presently there are 650,000 shares outstanding at RM21 each. There will 40,000 new shares offered at RM15 each. Calculate the following:

(i) New market value of the company. (3 marks)

(ii) Numbers of rights that associated with one new shares. (2 marks)

(iii) The ex-rights price. (2 marks) (iv) The value of a right. (2 marks)

\(v) Total flotation cost. Given the flotation cost is 7 percent. (4 marks)

(b) Elaborate any FOUR (4) defensive tactics used by firms to resist unfriendly attempts. (12 marks)