What is the value of a right

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Reference no: EM133492920

Question: Australian Land Ltd is planning a rights issue to raise funds. The subscription price is $16.50 and they want to raise $4,125,000. The current market price of their shares is $18.00 and there are currently 1,750,000 shares on issue.

Q1 - How many new shares need to be issued to raise the funds required?

Q2 - How many shares will entitle each holder to purchase one new share in the rights issue?

Q3 - What is the value of a right?

Q4 - What would the ex-rights price per share be if the rights issue is fully subscribed?

Reference no: EM133492920

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