Posted by: Pdfprep
Post Date: April 11, 2021
A company plans to raise $12 million to finance an expansion project using a rights issue.
Relevant data:
• Shares will be offered at a 20% discount to the present market price of $15.00 per share.
• There are currently 2 million shares in issue.
• The project is forecast to yield a positive NPV of $6 million.
What is the yield-adjusted Theoretical Ex-Rights Price following the announcement of the rights issue?
A . $16.00
B . $14.00
C . $9.00
D . $11.00
Answer: A
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