Nike Ltd has issued share capital 4 million ordinary shares, with a par value of $1 each share. The board of the company has accepted the proposal for a new venture and therefore needs to raise $2 million.
The finance director has suggested that this finance be raised by way of a 1 for 4 rights issue which will be priced at a 30$ discount to the current market price of $3 per share.
The finance director also recommended having the rights issue underwritten by an investment ban or relevant finance house at the time of issues.
Summary: This question belongs to finance and discusses about discusses about a company’s theoretical ex-rights price per share to raise capital.
Answer is in Excel format
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