Rights Offerings Rebel, Inc. is proposing a rights offering. Presently there are 400,000 shares outstanding at $75

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Rights Offerings Rebel, Inc. is proposing a rights offering. Presently there are 400,000 shares outstanding at $75 each. There will be 70,000 new shares offered at $70 each.

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

b. how many right 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: 978-0077861629

8th Edition

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

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Question Posted: May 09, 2011 04:21 AM

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Rights Offerings Rebel, Inc. is proposing a rights offering. Presently there are 400,000 shares outstanding at $75

Question:

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a The new market value will be the current shares outstanding times the stock ...View the full answer

Fundamentals of Corporate Finance

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