Valley Corp.'s stock is currently selling at $45 per share. There are 1 million shares outstanding. The firm is planning to raise $2 million to finance a new project. What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under the following scenarios?
a. Two shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Ex-rights stock price $ Value of a right $ Appropriate subscription price $
b. Four shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
Ex-rights stock price $ Value of a right $ Appropriate subscription price $
c. Assume an investor holds 4 shares of stock. What is her portfolio value under each rights offer? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
Two shares are required to purchase one additional share.
New portfolio value $ ?
Four shares are required to purchase one additional share.
New portfolio value $ ?
Show me the answer make all A, B AND C
| Valley Corp.'s stock is currently selling at $45 per share. There are 1 million shares outstanding. The firm is planning to raise $2 million to finance a new project. What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under the following scenarios? |
| a. | Two shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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Show me the answer make all A, B AND C
Related questions
| Roth Corp. wants to raise $4.6 million via a rights offering. The company currently has 560,000 shares of common stock outstanding that sell for $70 per share. Its underwriter has set a subscription price of $40 per share and will charge the company a spread of 2 percent. |
| If you currently own 2,500 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Subscription price | $ |
