The Lagrange Point Co. has proposed a rights offering. The shares currently sell for $40 per share.

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The Lagrange Point Co. has proposed a rights offering. The shares currently sell for $40 per share. Under the terms of the offer, shareholders will be allowed to buy one new share for every five that they own at a price of $25 per share. What is the value of a right? What is the ex-rights 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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