Rights A companys stock currently sells for $45 per share. Last week the firm issued rights to
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Rights A company’s stock currently sells for $45 per share. Last week the firm issued rights to raise new equity. To purchase a new share, a stockholder must remit $10 and three rights.
a. What is the ex-rights stock price?
b. What is the price of one right?
c. When will the price drop occur? Why will it occur then? LO.1
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