Before issue ;the company had 20,000 outstanding shares trading at R150 per share.
The company wants to raise R 2 million through a rights issue at a subscription price of R 100 each hence the number of rights is "\\frac{2,000,000} {100}" =20,000 shares.
Thus the theoretical value(after issue) =
"\\frac{Market value of shares prior to rights issue +Cash raised from rights issue} \n{Number of shares after rights issue}"
"\\frac{(20,000 \u00d7150) +2,000,000} {20,000+20,000}" ="\\frac{5,000,000}{40,000}" =125
=R125
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