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NOTE: Options 1 and 2 below are independent. If you are having trouble with one part, you can still completely solve the other part. Mandalorian
NOTE: Options 1 and 2 below are independent. If you are having trouble with one part, you can still completely solve the other part. Mandalorian Bail Bonds Inc. will conduct a rights issue in order to raise $192.0 million in funding to expand into other galaxies. The firm is currently valued at $ 1599.00 million with 19.50 million shares outstanding. The firm considers 2 alternative options: Option 1: The firm wants to set the subscription price at a 10.0% discount from the pre-announcement price. What subscription price does this imply?$ (Round to the nearest cent.) (non-integer numbers are likely; report up to 3 What is the number of shares N required to receive 1 right in this case? decimals) HINT: If the second question seems hard, simply pick a number N and check how much capital that would raise. This should help you to understand what equation you are trying to solve. What will be the value of 1 right? $ (Round to 3 decimals!) Option 2: The firm conducts a 6:1 rights issue. Assuming all rights will be exercised (and ignoring issuance costs), what is the lowest subscription price the company can offer and still raise the necessary funds? $ (Round to the nearest cent.) What percentage discount from the current price does the subscription price represent (enter a positive number)? % (Round to 2 decimals.) What will be the share price after the completed rights issue in this case? $ (Round to the nearest cent.)
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