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Calculate the value of the right

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Reference no: EM133112783

ABC Ltd. is a listed company with shares currently trading at $4.80. The company announces a 2 for 5 renounceable rights issue with a subscription price of $4.60.

  1. What is a rights issue and what does it mean when a rights issue is 'renounceable'? 
  2. Calculate the theoretical ex-rights share price 
  3. Calculate the value of the right 

Reference no: EM133112783

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