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Question 4A ( 3 marks) Richard Sonata Ltd currently has 80 million shares outstanding. The shares sell for $6 per share. To raise $100 million

Question 4A ( 3 marks)

Richard Sonata Ltd currently has 80 million shares outstanding. The shares sell for $6 per share. To raise $100 million for a new plant, the firm is considering an issue of rights offering at $5 per share.

How many new shares are to be sold? How many shares are to be held in order to get one new share? Compute the value of a right and also the value of an ex-rights share.

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