Red Shoe 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 $140 to $112 ($140 is the rights-on price; $112 is the ex-rights price,also known as the when-issued price). The company is seeking $14 million in additional funds with a per-share subscription price equal to $70. 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.)

Multiple Choice

• 312,000

• 315,000

• 181,000

• 288,000

• 300,000