Grenarp Co (June, 2015)

I have two doubts in the same question, (A) In part (a) of the question, I have calculated the revised share price which is $3.11(same as the answer given in BPP) but total shareholder wealth stated in BPP exam kit is as follows "Share price of Grenarp Co after redeeming loan notes = 8.33 X 0·373 = $3.11 per share (total market value =$3.11 X 20m shares = $62.2m)" Shouldn't the MV of shares be equal to $3.11 X 24M shares = 74.64m because extra 4m shares comes from rights issue? (B) in alternative solution, BPP has mentioned this below "The new value of the shares can be estimated as $8.96m x 8.33 which is approximately $74.64m. So, after subtracting the $11.2m invested in the rights issue, shareholders wealth has become $74.64m – $11.2m = $63.44m (or $3.17 per share). This is a fall in shareholder wealth of $6.56m." I didn't understand (why 11.2m was subtracted from MV of shares?) and (From where 6.56m came from?) Thanks