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Please solve: Momentum Motors wants to raise $8,265,000 via a rights offering. The company currently has 1,160,000 shares of common stock outstanding that sell for
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- Momentum Motors wants to raise $8,265,000 via a rights offering. The company currently has 1,160,000 shares of common stock outstanding that sell for $55 per share. Each existing share receives one right. Its underwriter has set a subscription price of $30 per share and will charge Turbo a 5% spread.
- How many new shares should the company offer?
- How many rights are required for each new share?
- What are the ex-rights stock price and the value of a right?
- If you currently own 5,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights?
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Principles Of Project Finance
Authors: E.R. Yescombe
1st Edition
0127708510, 978-0127708515
