Question
In: Finance
Mitsi Inventory Systems, Inc., has announced a rights offer. The company has announced that it will...
Mitsi Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take three rights to buy a new share in the offering at a subscription price of $61. At the close of business the day before the ex-rights day, the company’s stock sells for $85 per share. The next morning, you notice that the stock sells for $70 per share and the rights sell for $2 each. What price should the stock sell for ex-rights? Show your calculations to get credit. Answers without numeric calculations will not get credit.
- What is the value of one right?
- Are the rights underpriced or overpriced?
- What is the amount of instant profit you can make on ex-rights day per new share?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Knight Inventory Systems, Inc., has announced a rights offer. The company has announced that it will...
Knight Inventory Systems, Inc., has announced a rights offer.
The company has announced that it will take three rights to buy a
new share in the offering at a subscription price of $61. At the
close of business the day before the ex-rights day, the company’s
stock sells for $85 per share. The next morning, you notice that
the stock sells for $70 per share and the rights sell for $2
each.
What is the
value of the stock ex-rights?...
Mitsi Inventory Systems, Inc., has announced a rights offer. The company has announced that it will...
Mitsi Inventory Systems, Inc., has announced a rights offer. The
company has announced that it will take two rights to buy a new
share in the offering at a subscription price of $60. At the close
of business the day before the ex-rights day, the company’s stock
sells for $90 per share. The next morning, you notice that the
stock sells for $70 per share and the rights sell for $3 each.
What price should the stock sell for ex-rights?...
The Clifford Corporation has announced a rights offer to raise $20 million for a new journal,...
The Clifford Corporation has announced a rights offer to raise
$20 million for a new journal, the Journal of Financial
Excess. This journal will review potential articles after the
author pays a nonrefundable reviewing fee of $4,000 per page. The
stock currently sells for $40 per share, and there are 1.5 million
shares outstanding.
a.
What is the maximum possible subscription price? What is the
minimum? (Leave no cells blank - be certain to enter "0"
wherever required.)
b.
If...
The Clifford Corporation has announced a rights offer to raise $21 million for a new journal,...
The Clifford Corporation has announced a rights offer to raise
$21 million for a new journal, the Journal of Financial
Excess. This journal will review potential articles after the
author pays a nonrefundable reviewing fee of $5,000 per page. The
stock currently sells for $69 per share, and there are 1.4 million
shares outstanding.
a.
What is the maximum possible subscription price? What is the
minimum? (Leave no cells blank - be certain to enter "0"
wherever required.)
b.
If...
The Clifford Corporation has announced a rights offer to raise $36 million for a new journal,...
The Clifford Corporation has announced a rights offer to raise
$36 million for a new journal, the Journal of Financial
Excess. This journal will review potential articles after the
author pays a nonrefundable reviewing fee of $5,000 per page. The
stock currently sells for $36 per share, and there are 1.8 million
shares outstanding.
ch15.2
a.
What is the maximum possible subscription price? What is the
minimum? (Leave no cells blank - be certain to enter "0"
wherever required.)
b....
The Clifford Corporation has announced a rights offer to raise $15 million for a new journal,...
The Clifford Corporation has announced a rights offer to raise
$15 million for a new journal, the Journal of Financial
Excess. This journal will review potential articles after the
author pays a nonrefundable reviewing fee of $3,000 per page. The
stock currently sells for $30 per share, and there are 1.8 million
shares outstanding.
a.
What is the maximum possible subscription price? What is the
minimum? (Leave no cells blank - be certain to enter "0"
wherever required.)
b.
If...
The Clifford Corporation has announced a rights offer to raise $15 million for a new journal,...
The Clifford Corporation has announced a rights offer to raise
$15 million for a new journal, the Journal of Financial Excess.
This journal will review potential articles after the author pays a
nonrefundable reviewing fee of $4,000 per page. The stock currently
sells for $32 per share, and there are 2.7 million shares
outstanding.
a. What is the maximum possible subscription price? What is the
minimum? (Leave no cells blank - be certain to enter "0" wherever
required.)
b. If...
Moullierat Mfg. is considering a rights offer. The company has determined that the ex-rights price will...
Moullierat Mfg. is considering a rights offer. The company has
determined that the ex-rights price will be $98. The current price
is $106 per share, and there are 30 million shares outstanding. The
rights offer would raise a total of $50 million.
What is the subscription price?
10. Hothouse Mfg. is considering a rights offer. The company has determined that the ex-rights price...
10. Hothouse Mfg. is considering a rights offer. The company has
determined that the ex-rights price will be $61. The current price
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Bell Hill Mfg. is considering a rights offer. The company has determined that the ex-rights price...
Bell Hill Mfg. is considering a rights offer. The company has
determined that the ex-rights price would be $78. The current price
is $100 per share, and there are 25 million shares outstanding. The
rights offer would raise a total of $50 million.
What is the subscription price? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Subscription
price
$
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