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What would be the theoretical value of one right for abc

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Reference no: EM132743607

ABC is a listed company with 10 million shares currently trading at $10.00 per share. ABC is considering raising an additional $20 million capital through a renounceable rights issue at a subscription price of $8.00 per share.

Problem a) How many shares will be required to own one right?

Problem b) What would be the theoretical value of one right for ABC?

Problem c) What would be the best estimate of the ABC share price on the ex-rights date?

Reference no: EM132743607

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