4. 13. Value of a right [LO 15.4] Show that the value of a right just prior...

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4. 13.

Value of a right [LO 15.4] Show that the value of a right just prior to expiration can be written as:

Value of a 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 buy one new share at the subscription price.

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Fundamentals Of Corporate Finance

ISBN: 9781743768051

8th Edition

Authors: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch, Kristoffer Glover, Randolph W. Westerfield, Bradford D. Jordan

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Question Posted: Oct 03, 2024 06:02 AM

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4. 13. Value of a right [LO 15.4] Show that the value of a right just prior...

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Fundamentals Of Corporate Finance

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