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Damron, Incorporated, has 260,000 shares of stock outstanding. Each share is worth $90, so the companys market value of equity is $23,400,000. Suppose the firm

Damron, Incorporated, has 260,000 shares of stock outstanding. Each share is worth $90, so the company’s market value of equity is $23,400,000. Suppose the firm issues 66,000 new shares at the following prices: $90, $84, and $78. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share?

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