Question
Savone Industries Ltd (SAI) has just announced that it is raising additional equity capital through a renounceable rights offering. SAI currently has 8,000,000 shares outstanding.
Savone Industries Ltd (SAI) has just announced that it is raising additional equity capital through a renounceable rights offering. SAI currently has 8,000,000 shares outstanding. On the last day they were trading cum-rights the companys share price was $2.50. Under the rights-offering SAI will be issuing 3,000,000 new shares at a 10% discount to the cum-rights price.
What are the terms of the rights offering, and what will be the theoretical ex-rights price of SAI stock?
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Finance Operations
Authors: Charles Finley
1st Edition
1491292423, 978-1491292426
