Burt, This issue here is one of "control". You see, typically a...

Burt,

This issue here is one of "control". You see, typically a rights issue with a lower price will attract greater "participation" from shareholders and vice versa.

Therefore by inappropriately pricing at an "inflated price", a potential sub-underwriter can achieve a greater take-up in any potential shortfall..

A failure to adequately grasp this concept is why PRC is still viewed as at attractive alternative by some shareholders. Many shareholders think PRC are actually doing the company a favor by potentially proposing a rights issue at a price that does not necessarily represent market value - A shareholder must look deeper into the underlying motive of pricing.. Why price it so high? Oh, so you can get more shortfall.. aha, I get it..