Proposal to raise funds via a rights issue

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On 18 December 2019, Japfa Limited, an industrial agri-food company listed on the Singapore Exchange (SGX) announced a proposal to raise funds via a rights issue. The stock closed at $0.575 that day, and the announcement was made after the market close. The Offer Information Statement (OIS) lodged with the Monetary Authority of Singapore is dated 14 January 2020. You are discussing this rights issue with a friend. Use the information on the rights issue from the OIS, which can be retrieved from the SGX website, to answer the following questions:

One friend says that this rights issue will cause Japfa's projects to be more attractive from an NPV standpoint, while the other insists that the capital raising exercise will cause Japfa's projects to be less attractive. Appraise their arguments

Reference no: EM133073934

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