Price Dilution Raggio, Inc., has 100,000 shares of stock outstanding. Each share is worth $90, so the
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Price Dilution Raggio, Inc., has 100,000 shares of stock outstanding. Each share is worth
$90, so the company’s market value of equity is $9,000,000. Suppose the firm issues 20,000 new shares at the following prices: $90, $85, and $70. What will the effect be of each of these alternative offering prices on the existing price per share? LO.1
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