A company needs to raise $20 million to finance a project.

A company needs to raise $20 million to finance a project.

It has decided on a rights issue at a discount of 20% to its current market share price.

There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per share.

Calculate the terms of the rights issue.
A . 1 new share for every 4 existing shares
B . 1 new share for every 20 existing shares
C . 1 new share for every 5 existing shares
D . 1 new share for every 25 existing shares

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Answer: A