Question
Amir Khan own five shares of Khan Corporations common stock. The marker value of the stock is Tk. 60. Amir Khan also has .Tk.
Amir Khan own five shares of Khan Corporations common stock. The marker value of the stock is Tk. 60. Amir Khan also has .Tk. 48 in cash. He has just received word of a rights offering. One new share of stock can be purchased at Tk. 48 for each five shares currently owned (Based on five rights). 1. What is the value of rights? 2. What is the value of after rights per share? 3. What is the value of the Amir's portfolio before the rights offering? 4. What is the value of the Amir's portfolio if he participates in the right offering? 5. What is the value of the Amir's portfolio if he sales his rights? 6. What is the value of the Amir's portfolio if he does not exercise his rights?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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