uestion 1 (12 marks The management of Dragonfly Inc. has decided to increase its equity capital by undertaking a rights issue. It is planned to raise additional capital of S20 million. The company has 5,000,000 outstanding common shares with a current market price of S50 per share. Shareholders need 10 rights to buy a new share a) Calculate the ex-rights price per share and the value of a right (7 marks) Justin currently has 20,000 shares of Dragonfly's common stock and $50,000 cash. Assume Justin exercises his rights to buy the new shares, determine the amount of gain or loss for Justin. (5 marks) b) uestion 2 (18 marks $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price of 105-20 (this is the clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Face value per unit is $1,000 i) Calculate the clean price of the bond issue i) Calculate the accrued interest of the bond issue a) iii) calculate the full price of the bond issue (12 marks) b) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Calculate the full price (per unit of the bond) (6 price) Note: On a per unit basis, the answers to (a) and (b) should be the same. Any difference must be due to rounding error only