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The Rising Sun Ltd currently has 75 million shares outstanding. The shares sell for $6 per share. To raise $100 million for a new plant,
The Rising Sun Ltd currently has 75 million shares outstanding. The shares sell for $6 per share. To raise $100 million for a new plant, the firm is considering a rights offering at $4 per share. Discuss TWO advantages of rights issue.
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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