Associated Breweries is planning to market unleaded beer. To finance the venture, it proposes to make a rights issue with a subscription price of $10. One new share can be purchased for every four shares held. The company currently has outstanding 160,000 shares priced at $20 a share. Assuming that the new money is invested to earn a fair return, give values for the following:
a. Number of new shares. Number of new shares
b. Amount of new investment. New investment $
c. Total value of company after issue. Value of company $
d. Total number of shares after issue. Total number of shares
e. Share price after the issue. Share price after issue $