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6. Now assume that Evergrowth needs $100 million additional equity financing for its expansion project. The company plans to use rights offering with a $40

image text in transcribed 6. Now assume that Evergrowth needs $100 million additional equity financing for its expansion project. The company plans to use rights offering with a $40 subscription price.Evergrowth stock currently sells at $50 per share and there are 10 million shares outstanding. Questions a. Determine the number of rights per new share? b. What is the total equity value ex-rights? c. What is the number of shares ex-rights? d. What is the ex-right price of the share? e. What is the value of a right from the firm perspective? from shareholder 's perspective? f. What is the value of a right from the shareholder's perspective assuming a holding of 4 shares before rights offering? g. Should existing shareholders always exercise their rights? Assume a holding of 100 shares before rights offering for one shareholder. Justify your

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