Math/Physic/Economic/Statistic Problems
Answer the following questions
a.) What is the total amount of capital that Freemans Capital needs to raise for Darwin Brighton?
b.) How many new shares will Freemans Capital sell?
c.) Calculate the theoretical ex–rights price for Darwin Brighton.
d.) What is the size of the working capital and hence the net debt of Darwin Brighton afterwards?
e.) Calculate the gearing ratio of Darwin Brighton after the raising, based on the market value of equity after the raising using the theoretical ex–rights price.
f.) What is the effect on the offer price of the new shares if Freemans Capital does not underwrite the capital raising? Give reasons for your answer.