You are required to determine:

i) The number of new shares to be issued if all rights were exercised.

ii) The number of rights required to buy a new share,

iii) The changes in balance sheets after the right issue.

To finance the new project, Rich Corp. needs additional capital of RM100 million. The company is considering issuing rights offer to their shareholders. The market price of share is RM15. The subscription price is RM10. Below is the extracted balance sheet for Rich Corp. RM (million) 80 Common stock (RM4 at par) Premium Retained Earnings Total Shareholder's Equity 20 10 110