Knight Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take Two rights to buy a new share in the offering at a subscription price of $60. At the close of business the day before the ex-rights day, the companys stock sells for $90 per share. The next morning, you notice that the stock sells for $70 per share and the rights sell for $3 each.

What is the value of the stock ex rights? (Round your answer to 2 decimal places. (e.g., 32.16))

Stock ex rights

$

What is the value of the rights?

Value of the rights

$

Are the rights underpriced or overpriced?

What is the amount of instant profit you can make on ex rights day per share?

Instant profit

$