Question: Green Lantern Enterprises has just completed an initial public offering. The firm sold 3,800,000 new shares at an offerprice of$10.50 per share.Theunderwritering spreadwas$0.86 a share.

  1. Green Lantern Enterprises has just completed an initial public offering. The firm sold 3,800,000 new shares at an offerprice of$10.50 per share.Theunderwritering spreadwas$0.86 a share. The firm incurred $375,000 in legal, administrative, and other costs. What was the cost to the firm of the underwriting spread?
  2. The Clifford Corporation has announced a rights offer to raise $30 million.The stock currently sells for $18 per share and there are 60 million shares outstanding. If the subscription price is set at $5 per share, how many shares must be sold? How many rights will it take to buy one share? What is the ex-rights price (the share price after the offer is complete)? Round your answer to 2 decimal places. What is the value of a right? Round your answer to 2 decimal places.

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