[natashapattinson]

Please can someone help me with the below question 🙂

Able PLC is raising finance through a rights issue and the current ex dividend market price of its shares is £2.50.
The rights issue is on a 1 for 4 basis and the new shares will be offered at a 20% discount to the current market price.
Mr Smith is an investor who owns 20,000 shares of Able PLC.

Using the information provided discuss the effects of the proposed rights issue on the personal wealth of Mr Smith (calculations are required)

thank you in advance for any help provided 🙂

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