Question
In: Finance
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 five rights to buy a new share in the offering at a subscription price of $25. At the close of business the day before the ex-rights day, the company’s stock sells for $55 per share. The next morning, you notice that the stock sells for $45 per share and the rights sell for $3 each. |
| What is the value of the stock ex-rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| What is the value of a right? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| Are the rights underpriced or overpriced? |
|
What is the amount of immediate profit you can make on ex-rights day per share? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
Solutions
jeff jeffy answered 3 months 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 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?...
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...
Katty Kit has announced a rights offer to raise $8 million. There are currently 1,500,000 shares...
Katty Kit has announced a rights offer to raise $8 million.
There are currently 1,500,000 shares on issue trading at $21.06
each. The total number of shares on issue after the the rights
issue will be 2,000,000. Calculate the theoretical ex-rights price
and the value of a right.
$19.80 ; $3.80
$16.00; $5.06
$21.06; $1.27
$19.80; $1.80
Cannot be determined, insufficient information
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?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 23- Celsius Corp. is conducting a capital budgeting analysis to decide whether to invest in a...
- Using energy level diagrams, predict the relative stability of a Br2 molecule as well as the...
- A 0.0038 kg leaf falls 16.8 m to the ground, where it lands with a speed...
- Problem 1: In the figure to the right, m1=20.0kg and α=53.1o . The coefficient of kinetic...
- A palindrome is a string whose reversal is identical to the string. For example, 110010011 is...
- Explain how the shape of the load duration curve for a particular system affects the selection...
- For physics discussion post. Please TYPE the response as I struggle with reading written information. Explain...
ADVERTISEMENT