Milliken Co. has concluded that additional equity financing will be needed to expand operations and that...

 

Transcribed Image Text:

Milliken Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. It has correctly determined that as a result of the rights offering, the share price will fall from $51 to $49.30 ($51 is the rights-on price; $49.30 is the ex-rights price, also known as the when-issued price). The company is seeking $17 million in additional funds with a per share subscription price equal to $35. How many shares are there currently, before the offering? (Assume that the increment to the market value of the equity equals the gross proceeds from the offering.) (Round the intermediate calculations and final answer to the two decimal places and not in millions.) Number of old shares Milliken Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. It has correctly determined that as a result of the rights offering, the share price will fall from $51 to $49.30 ($51 is the rights-on price; $49.30 is the ex-rights price, also known as the when-issued price). The company is seeking $17 million in additional funds with a per share subscription price equal to $35. How many shares are there currently, before the offering? (Assume that the increment to the market value of the equity equals the gross proceeds from the offering.) (Round the intermediate calculations and final answer to the two decimal places and not in millions.) Number of old shares

Answer rating: 100% (QA)

The Formula used is Ex right price 4930 N share N1 N 5... View the full answer