Workshop 1 – Capital Budgeting a) Describe in detail the different sources of equity financing for private firms. Which one is preferable? Why?

(iii)Mancunian Industries originally had 100 million shares of stock outstanding at a price of £25 per share. What if the company executives had announced a rights issue instead of an SEO? How much money would they be able to raise? (5 Marka)Details of the right issue: “Every existing shareholder will be sent one right per share of stock that he or she owns. The company plans to require twenty rights to purchase one share at a price of £20 per share.”  (TOTAL 35 marks)

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