Case study.pdf - Case study CWG Holdings Rights Issue(due 2...

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Case study: CWG Holdings Rights Issue (due 2 Oct 2017, 1 week) Work in pairs & answer the following questions based on CWG Holding Bhd’s prospectus filed on 14 September 2017. 1. What are the new proceeds raised from this rights issue exercise? (1 mark) 2. Mentioned in the prospectus (page 8) that the four reasons to conduct the rights issue exercise are: (i) repay bank borrowings, (ii) reduce leverage level, (iii) provides opportunity to existing shareholders to buy new shares & (iv) to enhance the liquidity CWG shares. For each of these reasons, explain why they matter/important. (4 marks) 3. How many rights needed to buy a share of stock? (1 mark) 4. Is (2) above different from using Ross s formula in page 659? (1 mark) 5. How many new shares you could subscribe if you currently owned 1,000 shares of stock in CWG?
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