9. St. Paul Corporation is planning to raise $35,000,000 through the sale of new common stock under a rights offering. The subscription price is $70 per share.

The stock currently sells for $80 per share, rights on. Total outstanding shares equal 10,000,000. Of this amount, AddieJoss owns 100,000 shares.

a. How many shares of stock will each right permit its owner to purchase?

b. What will be the total value of Addie's rights a day before the ex-rights date, assuming that the market price of St. Paul stock remains at $80 per share?

c. After the ex-rights date, if the market value of each St. Paul right equals $.20, what must he the ex-rights market price of St. Paul's stock?