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You are the CFO of a company that has 100 million shares outstanding. Its shares are currently trading at RM10 per share from its issue

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You are the CFO of a company that has 100 million shares outstanding. Its shares are currently trading at RM10 per share from its issue price of RM8. You need to raise RM200 million and have announced a rights issue. Each existing shareholder is sent one right for every share he/she owns. You have not decided how many rights you will require to purchase a share of new stock. You can either: a. Require four rights to purchase one share at a price of RM8 per share or; b. Require five rights to purchase two shares at a price of RM5 per share. Which approach will raise more money? Will your shareholders exercise these rights? Explain your answer and show all calculations

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