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A company wants to raise $10 million through rights offering. The subscription price is $20, and the current stock price is $25. The firm currently

A company wants to raise $10 million through rights offering. The subscription price is $20,

and the current stock price is $25. The firm currently has 5,000,000 shares outstanding.

What is the expected stock price that prevails after the rights offering? What is the value of a right?

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