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Discuss the share price movements in the context of theories

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Problem 1: Rolls Royce PLC announced a rights issue on the 1st of October 2020. The issue was a 10 for 3 rights issue to raise £2 billion prices at 32 pence a share, The theoretical ex-rights price would have been 55 pence a share. The Rolls Royce share price on the London Stock Exchange fell to 39 pence on the 2nd of October 2020 and is currently (15 June 2021) trading at 109 pence. Discuss these share price movements in the context of theories around price reactions to share issues.

Reference no: EM132949188

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