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Explain the procedures involved in issuing shares under an ‘offer for sale’ and an offer for tender

2 marks b. If the rights issue is not taken up by the shareholders it can be sold on the market. What could the right be sold for in the above scenario? 2 marks c. A major shareholder of Harpers plc has 300,000 shares and is concerned as to the effect on the value of his holding initially after the rights issue. i. Show the value of this shareholders holding before any rights issue. 1 mark ii. Calculate the value had the shareholder fully taken up the offer. 4 marks iii. What would be his value if all the rights had been sold? 2 marks iv. The shareholder decides to purchase half the shares on offer and sell the remaining rights. Demonstrate how the total of his holding will be unaffected immediately after the rights issue. 2 marks v. How much additional capital will Harpers plc generate from the rights issue? 2 marks d. Shares can be issued in a number of different ways other than through a rights issue. Explain the procedures involved in issuing shares under an ‘offer for sale’ and an ‘offer for tender’. 4 marks e. What characteristics distinguish convertible loan stock from ordinary loan stock and why would you consider the issue of convertible loan stock to be attractive? 6 marks f. Harpers plc has issued ordinary shares but is investigating the option of including preference shares into its capital structure. Explain the four types of preference shares the company could issue. 8 marks

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