Question
Muskoka Tourism has announced a rights offer to raise $30 million for a new magazine, titled Discover Muskoka. The magazine will review potential articles after
Muskoka Tourism has announced a rights offer to raise $30 million for a new magazine, titled Discover Muskoka. The magazine will review potential articles after the author pays a nonrefundable reviewing fee of $5,000 per page. The stock currently sells for $52 per share and there are 3.9 million shares outstanding.
Required
1. What is the maximum possible subscription price? What is the minimum?
2. If the subscription price is set at $46 per share, how many shares must be sold? How many rights will it take to buy one share?
3. What is the ex-rights price? What is the value of a right?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
15th edition
77861612, 1259194078, 978-0077861612, 978-1259194078
