Answer:
Right price =$33.50
Explanation:
The theoretical ex-right price is the weighted average price at which shares are expected to settle after a right-issue,
It is the weighted average price of value of shares of the before-right price and the right price
Ex-rights price
=(Before-right value of shares + Proceed from rights )/Total number of shares after rights issue
Number of rights issue units = amount to be raised /Right price per share
= $5.1 m/$30 = 170,000 units
Before - rights value = 1,207,000 × $34 = 41,038,000
Proceed from rights = 170,000 × $30 = 5,100,000
The ex-right price = (41,038,000 + 5,100,00)/(1,207,000 +170,000) units
Right price =$33.50
