Big Box Retailing Has a Market Capitalisation of $500 Million

question 94

Multiple Choice

Big Box retailing has a market capitalisation of $500 million and 2 million shares outstanding. In order to finance its growth, the management of Big Box plans to raise further capital through a rights issue. All shareholders will be issued ten rights to purchase ten shares at a price of $1.50 per share. How much money will this raise, if all shareholders exercise their rights?

• A)$15 million
• B)$30 million
• C)$60 million
• D)$45 million

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Definitions:

Ending Balance

The amount of money or value in an account at the end of a financial reporting period, after all additions and subtractions have been accounted for.

Cost of Goods Manufactured

The entire cost associated with the production of finished goods within a certain timeframe, encompassing expenses for labor, materials, and overhead.

Ending Balance

The ending balance is the final amount in an account at the conclusion of a period after all debits and credits have been accounted for.

Unit Product Cost

The total cost (fixed and variable) divided by the number of units produced, representing the cost per single unit of product.