Cash from Rights Issue Only Steps:

• Starting shares: 200,000.
• Rights issue: 200,000 / 5 = 40,000 new shares issued at $1.50 each.
• Cash received: 40,000 × $1.50 =$60,000.
• Bonus issue: No cash generated, as shares issued from reserves.

Why B is correct:

• Rights issues raise cash by selling new shares; bonus issues do not, per accounting standards (IAS 32).

Why the others are wrong:

• A: Ignores $1.50 price, using$1 nominal value for 40,000 shares.
• C: Overstates by assuming $2.50 price or including bonus value.
• D: Adds erroneous bonus cash (e.g., 90,000 shares at $1.50).

Final answer: B