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How much can each right be sold for

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Reference no: EM132963027

LPO Limited has 19 million ordinary shares outstanding which were originally issued at $2.16 but now trading at $49. Management is planning to raise extra share capital through a 1-for-3 renounceable rights issue at $39.

Problem 1: Calculate the theoretical share price, to the nearest cent, following the rights issue.

Problem 2: If an investor wishes to sell their rights rather than take up the offer, how much can each right be sold for, to the nearest cent?

Reference no: EM132963027

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