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 $80 to $72 ($80 is the rights-on price; $72 is the ex-rights price,also known as the when-issued price). The company is seeking $13 million in additional funds with a per-share subscription price equal to $40. 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.)

rev: 09_20_2012

1,248,000

1,352,000

1,365,000

1,300,000

242,667