A company plans to raise S15 million to finance an expansion project using a rights...

Step 1 – Determine rights price and number of new shares

Current share price = $12.50

20% discount → rights price = 12.50 × 0.8 = $10.00

Amount to be raised = $15m → new shares = 15 / 10 = 1.5m

Total shares after issue = 3m + 1.5m = 4.5m

Step 2 – Total equity value after financing and project

Current equity value = 3m × 12.50 = $37.5m

Add cash raised = +15m → 52.5m

Add NPV of project = +9m → $61.5m

Step 3 – Yield-adjusted TERP

TERP=61.54.5=13.666⋯≈$13.67\text{TERP} = \frac{61.5}{4.5} = 13.666\dots \approx \$13.67TERP=4.561.5​=13.666⋯≈$13.67

✅ Answer: D. $13.67