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Your company is contemplating a rights issue to fund a project which you have estimated has an NPV of £100m. The rights issue would be on a 1 for 5 basis and raise £300m. The issue price would be 650p, a 15% discount to your current share price of 765p.
Assuming that you can persuade the market that your estimate of NPV is right, what will be the equilibrium price of your company's shares after the rights issue?
