Calculate the expected theoretical value of one right

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Shares in Blimp Ltd are trading on the Australian Securities Exchange at $20 per share immediately prior to an announcement of a renounceable rights issue of new shares. For each 4 shares currently held in Blimp Ltd, a shareholder has the right to buy 1 new share at $16.

i. Calculate the expected value of Blimp Ltd's share immediately after the completion of this offer.

ii. Calculate the expected theoretical value of one right.

Reference no: EM132569599

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