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:

Another friend joins the conversation. She says that, after 31 January 2020, which is expiration date for the rights shares, if you do not exercise the rights, the value associated with the rights vanishes into thin air. Assess this other friend's statement, quantitatively if applicable.

Reference no: EM133075213

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