n tueston Baker has 245,000 votes (35,000 7) Intermediate Problems 11. Rust Pipe Co. was established in 1994. Four years later the company went public. At that time. Robert Rust, the original owner, decided to establish two classes of stock. The first represents Class A founders' stock and is entitled to 9 votes per share. The normally traded common stock, designated as Class B, is entitled to one vote per share. In late 2010. Mr. Stone, an investor, was consid- ering purchasing shares in Rust Pipe Co. While he knew the founders' shares were not often present in other companies, he decided to buy the shares anyway because of a new technology Rust Pipe had developed to improve the flow of liquids through pipes. ent classes of stock I) Of the 1.450,000 total shares currently outstanding, the original founder's family owns 51.825 shares. What is the percentage of the founder's family votes to Class B votes? Boles Bottling Co. has issued rights to its shareholders. The subscription price is $45 and four rights are needed along with the subscription price to buy one of the new shares. The stock is selling for $55 rights-on. a. What would be the value of one right? ffering 12. If the stock goes ex-rights, what would the new stock price be? Computer Graphics has announced a rights offering for its shareholders. Carol Stevens owns 1,400 shares of Computer Graphics stock. Four rights plus $54 cash are needed to buy one of the new shares. The stock is currently selling for $66 rights-on. 13. es d with a ering What is the value of a right? How many of the new shares could Carol buy if she exercised all her rights? How much cash would this require? Carol doesn't know if she wants to exercise her rights or sell them. Would either alternative have a more positive effect on her wealth? b. c