What is the equilibrium quantity and price charged to each customer?

$($b$)$ Suppose resale is possible, what is the equilibrium quantity and price?Use the following information for questions $1$ to $3.$

Rights Plc has an ordinary shares capital of $$1,200,000$ in $$1$ par shares, an

accumulated balance of $$500,000$ in the retained earning and a balance of

$$500,000$ in the share premium account as at $1^{st}$ January $2017.$ The company

is also financed by a $5\%$ non current liability loan of $$500,000$ and a issue of

redeemable $6\%$ preference shares of $$300,000$ at $$1\mathrm{.}00$ par.

On the $1$st December $2017,$ the company undertook a $1$ for $3$ rights issue at a

price $$3$ per share. The operating profit was $$800,000$ for the year$-$ended $31$

December $2017,$ of which $20\%$ is expected to be paid out as equity dividends.

The company pays taxes at a rate of $20\%.$

Question $1-1$ mark

Compute the gearing ratio $($based on debt to equity$)$ as at $1$st January $2017.$

a$)22\mathrm{.}73\%$

b$)36\mathrm{.}36\%$

c$)20\mathrm{.}00\%$

d$)26\mathrm{.}67\%$

Question $2-1$ mark

Compute the cash proceeds as a result of the rights issue as at $1^{st}$ December

a$)$ $$400,000$

b$)$ $$800,000$

c$)$ $$1,200,000$

d$)$ $$300,000$

Question $3-1$ mark

Compute the earnings per share for the year ended $31$ December $2017.$

a$)$ $$0\mathrm{.}38$ per share

b$)$ $$0\mathrm{.}48$ per share

c$)$ $$0\mathrm{.}20$ per share

d$)$ $$0\mathrm{.}50$ per share