Answered: rights.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

As the Covid-19 pandemic thrusts the travel industry into an unprecedented crisis, Singapore Airlines (SIA) unveiled plans to raise up to $5.31 billion through a 3-for-2 rights issue of 1.77 billion new shares. The issue price of each rights represents a discount of about 53.85% to the last transacted price on the last trading day prior to the announcement.

(a) Compute the issue price of each rights.

(b) What is the last transacted price prior to the announcement (round to the nearest cent)?

(c) What is the outstanding number of shares of the company prior to the announcement?

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