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Raggio, Inc., has 100,000 shares of stock outstanding. Each share is worth $58, so the companys market value of equity is $2,700,000. Suppose the firm
Raggio, Inc., has 100,000 shares of stock outstanding. Each share is worth $58, so the companys market value of equity is $2,700,000. Suppose the firm issues 23,000 new shares at the following prices: $58, $55, and $50. |
What will the effect be of each of these alternative offering prices on the existing price per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Leave no cells blank; if there is no effect select "No change" from the dropdown and enter "0".) |
Price Ex Rights | Effect | Amount | |||
a. | $58 | $ | (Click to select)Price drops byPrice increases byNo change | $ | per share |
b. | $55 | $ | (Click to select)Price drops byNo changePrice increases by | $ | per share |
c. | $50 | $ | (Click to select)Price increases byNo changePrice drops by | $ | per share |
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