Question: Todd Winningham IV has $ 4 , 5 0 0 to invest. Todd owns shares of Gallagher Tennis Clubs Inc. Gallagher has issued a rights
Todd Winningham IV has $ to invest. Todd owns shares of Gallagher Tennis Clubs Inc. Gallagher has issued a rights offering to its common shareholders. Five rights plus $ cash will buy one new share. Gallagher's stock is selling for $ exrights.
a How many rights could Todd buy with his $
Number of rights
a Alternatively, how many shares could he buy with the same $ at $ per share? Round the final answer to the nearest whole number.
Number of shares
b If Todd invests his $ in Gallagher rights and the price of Gallagher stock rises to $ per share exrights, what would be his dollar profit on the rights? First compute profits per right.Do not round intermediate calculations.
Dollar profit $
c If Todd invests his $ in Gallagher shares and the price of a share rises to $ per share exrights, what would be his total dollar profit? Round intermediate calculations.
Total dollar profit
$
d What would be the answer to part if the price of a Gallagher share price falls to $ per share exrights instead of rising to $Negative answer should be indicated by a minus sign.
Dollar profit loss on the rights
$
e If Todd invests his $ in Gallagher stock and the price of the stock falls to $ per share exrights, what would his dollar profit beNegative answer should be indicated by a minus sign.
Dollar nrefit Ince on the stork
$
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