10. MADA Company has 100,000 shares of stocks outstanding. Each share is worth $80, so the companys market value of equity is $8,000,000. Suppose the firm issues 20,000 new shares at $65. What is the number of rights needed per share? What is the offer price on the existing price share?

a.

Number of rights needed is 5 rights and the offer price is $76.50

b.

Number of rights needed is 6 rights and the offer price is $78.50

c.

Number of rights needed is 5 rights and the offer price is $77.50

d.

Number of rights needed is 5 rights and the offer price is $79.50

e.

Number of rights needed is 6 rights and the offer price is $77.50

24 . Which three of the following are drawbacks of the risk-adjusted discount rate method?

a.

Investors tend to consider risk of less importance than project managers.

b.

Risk perception is inevitably susceptible to personal bias.

c.

It is extremely easy to allocate projects to risk classes.

d.

There is a no high level of arbitrariness in the selection of risk premiums.

29. What is the theoretical ex-rights price?

a.

The weighted average of the price of the existing shares and the new shares

b.

The mean price of the existing shares and their historic values

c.

The weighted average of the price of the existing shares and their historic values

d.

The mean price of the existing shares and the new shares