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Could you please explain how you got the after right issue market value of the shares $74.64m?
Before right issue, market value of equity = 10*0.5*3.5 =70m
I still can understand the video. Sorry for that. Thank you
Before the rights issue there were 20M shares in issue.
After the rights issue there are 20 x 6/5 = 24M shares in issue.
The new MV per share (using the PE valuation method) is $3.11. Therefore the total MV is 24M x $3.11 = $74.64M.
Did you watched the free lectures on rights issues and on PE valuations, before attempting the question?
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