Question
Cye, Inc., has 125,000 shares of stock outstanding. Each share is worth $70, so the companys market value of equity is $8,750,000. Suppose the firm
| Cye, Inc., has 125,000 shares of stock outstanding. Each share is worth $70, so the companys market value of equity is $8,750,000. Suppose the firm issues 15,000 new shares at the following prices: $70, $67, and $62. |
| What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share? (Leave no cells blank; if there is no effect select "No change" from the dropdown and enter "0". Round your answers to 2 decimal places, e.g., 32.16.) |
| Price Ex-Rights | Effect | Amount | |||
| a. | $70 | $ | (Click to select)Price drops byNo changePrice raises by | $ | per share |
| b. | $67 | $ | (Click to select)Price drops byPrice raises byNo change | $ | per share |
| c. | $62 | $ | (Click to select)No changePrice raises byPrice drops by | $ | per share |
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Globalization Gating And Risk Finance
Authors: Unurjargal Nyambuu, Charles S. Tapiero
1st Edition
1119252652, 978-1119252658
