Question $37$

The Board of Directors of Gloria Holdings International Limited $($GHIL$)$ decided, through a Board resolution, to raise additional capital through a rights issue to meet the new capital requirement set by the Bank of Ghana. GHIL plans to issue $1$ new share for every $3$ shares held by existing shareholders at a $15\%$ discount to its existing market price. GHIL currently has $8$ million shares in issue, and the current share price is GH$8\mathrm{.}40$ per share. GHIL's right issue cost is $GH700,000.$

Required:

$($a$)$ What are the advantages of raising capital through a rights issue?

$($b$)$ What are the disadvantages of raising capital through a rights issue?

$($c$)$ What is the theoretical ex$-$right price?

$($d$)$ Calculate the net funds raised by the rights issue.