A company wants to raise $8M using a Rights Issue.

- Shares are currently trading at $6

- Subscription Price is $4

How many shares will be issued ?

Question

A company wants to raise $8M using a Rights Issue.

- Shares are currently trading at $6

- Subscription Price is $4

How many shares will be issued ?

BlackTom AI · Accepted Answer

The question describes a Rights Issue aimed at raising 8 million dollars by issuing new shares at a subscription price of 4 per share, with the current market price given as 6 but not directly affecting the amount to be raised.

Key idea: the total amount to be raised equals (subscription price) × (number of new shares issued).

Let N be the number of new shares to be issued. Then 4 × N = 8,000,000.

Solving for N gives N = 8,000,000 ÷ 4 = 2,000,000.

Thus, the number of shares to be issued is 2,000,000.

If you consider the rights on offer, the actual trading dynamics of the stock price (6) are not used in this simple calculation of share count needed to raise a fixed amount; they would matter for valuing the combined new and existing share structure or calculating the theoretical ex-rights price, but not for the direct arithmetic of how many shares are issued to raise 8M at a subscription price of 4.

A company wants to raise $8M using a Rights Issue. - Shares are currently trading at $6 - Subscription Price is $4 How many shares will be issued ?简答题

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