Value of a Right show that the value of a right just prior to expiration can be
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Value of a Right show that the value of a right just prior to expiration can be written as: Value of right = PRO – Px = (PRO – PS) / (N + 1) where PRO, PS and Px stand for the rights-on-price, the subscription price, and the ex-rights price, respectively, and N is the number of rights needed to but one new share at the subscription price.
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Using P RO as the rightson price and P S as the subscription price we can express the pric...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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