=+Problem 6.4 Nancy King plc has 240 million ordinary shares already in issue, with a current market price of 330p per share. The company plans to raise an extra £180 million of equity capital by means of a rights issue. Two possible ways of achieving this (ignoring transaction costs) are being considered: either

(a) issuing 3 for 2 @

50p or else

(b) issuing 1 for 4 @ 300p.

a. For each alternative, calculate:

i. what the new total number of shares would be ii. what you would expect the new market price per share to be iii. the estimated value of the rights.