Farahs Fine Fashions (FFF) is considering raising money through a rights offering. FFF currently has 10 million shares outstanding selling for $22 per share. Current shareholders will receive one right per share. Four rights are required to buy one share for $20. Will the rights be exercised and if so, how much money will FFF raise if all rights are exercised?

Select one:

a.

The rights will not be exercised.

b.

$4 million

c.

$40 million

d.

$50 million

e.

None of the above.

Clear my choice