3. (15 points) Roth Corp. wants to raise $4.8 million via a rights offering. The company currently has 400,000 shares of common stock outstanding that sell for $30 per share. Its underwriter has set a subscription price of $25 per share and will charge the company a 4 percent spread. If you currently own 5,000 shares of stock in the company and decide not to participate in the rights offering, how much money will you get by selling your rights? Tip: Now the existing shareholders must bear the issuing costs (i.e., spread). Therefore, rights price no longer equals the difference between the stock prices before and after the rights offering, since the existing shareholders are deemed for the loss of the issuing costs. However, the indifference condition for new investors still holds