29 Rights A companys equity currently sells for 45 per share. Last week the firm issued rights...
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29 Rights A company’s equity currently sells for £45 per share. Last week the firm issued rights to raise new equity. To purchase a new share, a shareholder must remit £10 and three rights.
(a) What is the ex-rights share price?
(b) What is the price of one right?
(c) When will the price drop occur? Why will it occur then?
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