1 

Total size of portfolio is $ 100 mn. Now ATC Pty Ltd accounts for 3% of the portfolio.

So Portfolio Value in ATC Pty Ltd is $ 3 mn.

current share price is $ 3.00 / Share

so Total no of Shares = $ 3 mn / $ 3 per Share

Total no of Shares = 1 mn

Now Company announced 1 for 4 rights issue with a subscription price of $2.2 per share.

so they will have rights of 2,50,000 shares since they are holding 1 million shares.

a) Now if fund manager subscribe for the rights then ,

Total investment in rights = $2.2 / Share * 2,50,000

Total  value of rights = $5,50,000

So Total No of Shares = 12,50,000

Total Investment = $ 35,50,000

Value of ex-right share price = Total Investment / Total No of Shares

Value of ex-right share price = $ 35,50,000 / 12,50,000

Value of ex-right share price = $ 2.84 / Share

b)

There is no change in investment value c-u-m rights

Investment value after ex-rights = $ 2.84 * 12,50,000

Investment value after ex-rights = $ 35,50,000

c)

if Company announced 1 for 2 rights issue with a subscription price of $2.2 per share.

so they will have rights of 5,00,000 shares since they are holding 1 million shares.

if fund manager subscribe for the rights then ,

Total investment in rights = $2.2 / Share * 5,00,000

Total  investment in rights = $11,00,000

Investment Value after ex-rights = $ 30,00,000 + $ 11,00,000

Investment Value after ex-rights = $ 41,00,000 or $ 4.1 mn

2 

ANSWER

national culture

the effects of cultural factors on corporate financial decision-making have emerged in the finance literature. Culture shapes behaviors of people and distinguishes members of one group or category from another. The decision-making process depends greatly on cultural background. Executives’ financial decisions show variance from society to society as a result of their cultural differences. The objective is to point out the effects of national culture on financial decision-making. Hofstede’s cultural dimensions among 20 countries around the world to explain the variation of financial decisions based on cultural differences. According to our results, power-distance has an effect on all financial decisions included in the study, except for the capital structure. Individualism also has an influence on all the financial decisions we analyzed, except for Research & Development (R&D) expenditures. Uncertainty avoidance is found to have an effect on all of the financial decision parameters included here, except for discretionary accruals, which are an indication of a firm’s earnings-management decisions and can be considered as a clue for manipulation of earnings. Masculinity is found to have an effect only on capital structure and working capital level.