New money is invested to earn fair return

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Reference no: EM131586631

Associated Breweries is planning to market unleaded beer. To finance the venture, it proposes to make a rights issue with a subscription price of $10. One new share can be purchased for every four shares held. The company currently has outstanding 120,000 shares priced at $50 a share. Assuming that the new money is invested to earn a fair return, give values for the following:

a. Number of new shares. Number of new shares

b. Amount of new investment. New investment $

c. Total value of company after issue. Value of company $

d. Total number of shares after issue. Total number of shares

e. Share price after the issue. Share price after issue $

Reference no: EM131586631

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