A listed firm currently has 40 million shares selling for $12 a share.It wants to raise $100 million via a renounceable rights issue.The subscription price is $10 a share.The theoretical ex-rights price, and the value of a right is:
A) Pex-rights = $10.40, R = $0.40
B) Pex-rights = $11.00, R = $1.00
C) Pex-rights = $11.33, R = $1.33
D) Pex-rights = $11.60, R = $1.60
E) None of these.
Correct Answer:
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