Problem 14 contains details of a rights offering by Pandora Box. Suppose that the company had decided
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Problem 14 contains details of a rights offering by Pandora Box. Suppose that the company had decided to issue new stock at €4. How many new shares would it have needed to sell to raise the same sum of money? Recalculate the answers to questions
(b) to
(d) in Problem 14. Show that the shareholders are just as well off if the company issues the shares at €4 rather than €5.
Visit us at www.mhhe.com/bma 386 Part Four Financing Decisions and Market Efficiency AppendixLO1
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