A company requires funds to expand, and decides to issue a rights offering.

You have gathered the following information:

Number of shares outstanding 11,000,000

Market price per share $28.00

New shares to be issued 1,100,000

Subscription price per share $24.00

Required (round all to 2 decimal places):

1) How many rights are required to buy each share? Answer: Answer

2) What should the ex-rights price of a share be? Answer: $Answer

3) How many shares can you purchase by exercising your rights?

Shares you currently own: 11,000 Answer: Answer

How much will the shares cost you? Answer: $Answer

4) If the share price goes up by 10%, by what % will the price of a right go up?