Valiant Industries has 30 million shares of stock outstanding at a price of $25.44 per share....

Valiant Industries has 30 million shares of stock outstanding at a price of $25.44 per share. The company wishes to raise more money and plans to do so through a rights issue. Every existing stockholder will receive one right for each share of stock held. For every six rights held by the stockholder, they can buy one share at a price of $24.00 per share. If all rights are exercised, how much money will be raised in this offer? A. $127.2 million B. $720.0 million C. $120.0 million D. Some other amount

Expert Solution

CALCULATION OF THE MONEY RAIESED FROM THE OFFERE

Share outstanding =	$ 30.00	Million Shares
Total Rights =	30.00	Million Rights
1 new shares are issued against 6 Right
So number of shares are issued = $ 30 Million / 6 =	5.00	Million Shares
Issue price of the shares = 5 Million shares X $ 24 =	$ 120.00

So, Answer = Money raised from the offer = Option C = $ 120 Million

jeff jeffy answered 2 years ago

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