Value of a Right Show that the value of a right can be written as: Value of
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Value of a Right Show that the value of a right can be written as:
Value of a right 5 P RO 2 P X 5 ( P RO 2 P S )/( N 1 1)
where P RO , P S , and P X 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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Related Book For 
Corporate Finance With Connect Access Card
ISBN: 978-1259672484
10th Edition
Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe
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