Question: ( a ) Precipitate plc . is proposing a rights offering. Currently there are 7 5 0 , 0 0 0 shares outstanding at 1

(a) Precipitate plc. is proposing a rights offering. Currently there are 750,000
shares outstanding at 100 each. There will be 125,000 new shares offered at 70
each. (20 points)
Required:
i. What is the new market value of the company
ii. How many rights are associated with one of the new shares?
iii. What is the ex-rights price
iv. What is the value of a right?
v. Ignoring regulations, why might a company have a rights offering rather than
a general cash offer?
(a) Precipitate plc. is proposing a rights offering. Currently there are

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