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Exam F3 All Questions
Exam F3 All Questions

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CIMA Strategic F3 Question # 58 Topic 7 Discussion

F3 Exam Topic 7 Question 58 Discussion:
Question #: 58
Topic #: 7

A company needs to raise $20 million to finance a project.

It has decided on a rights issue at a discount of 20% to its current market share price.

There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per share.

 

Calculate the terms of the rights issue.


A.

1 new share for every 4 existing shares


B.

1 new share for every 20 existing shares


C.

1 new share for every 5 existing shares


D.

1 new share for every 25 existing shares


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