Associated Breweries is planning to market unleaded beer. To finance the venture it proposes to make a rights issue at $10 of one new share for each two shares held. (The company currently has outstanding 100,000 shares priced at $40 a share.) Assuming that the new money is invested to earn a fair return, give values for the following:
a. Number of new shares.
b. Amount of new investment.
c. Total value of company after issue.
d. Total number of shares after issue.
e. Stock price after the issue.
f. Price of the right to buy one new share.
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