[ritikasrivastava]

Please help me with this questions..

A company wishes to raise Rs 3000000 through a right offerings.It has 240000 shares outstanding which has been most recently trading between Rs106 and 116 per share. On the advice of SBI caps the company has set the subscription price for the rights at Rs 100 per share.
What will be the theoretical value of a right if the current market price is Rs109 with rights and the subscription price is Rs100?

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