Cherrywood Inventory Systems Inc. has announced a rights offer. The company has announced that it will take four rights to buy a new share in the offering at a subscription price of $31. At the close of business the day before the ex-rights day, the company’s stock sells for $56 per share. The next morning, you notice that the stock sells for $49 per share and the rights sell for $3 each. Are the stock and the rights correctly priced on the ex-rights day? Describe a transaction in which you could use these prices to create an immediate profit.