Lizard King, Inc., is proposing a rights offering. Presently there are 240,000 shares outstanding at $80 each.

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Lizard King, Inc., is proposing a rights offering. Presently there are 240,000 shares outstanding at $80 each. There will be 60,000 new shares offered at $60 each.

a. What is the new market value of the company?

b. How many rights are associated with one of the new shares?

c. What is the ex-rights price?

d. What is the value of a right?

e. Why might a company have a rights offering rather than a general cash offer?

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Fundamentals Of Corporate Finance

ISBN: 9780072553079

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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Question Posted: Oct 04, 2023 03:00 AM

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Lizard King, Inc., is proposing a rights offering. Presently there are 240,000 shares outstanding at $80 each.

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a New Market Value of the Company To find the new market value of the company you need to consider the value of the existing shares and the value of t...View the full answer

Fundamentals Of Corporate Finance

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