Summit Corp.'s stock is currently selling at $42 per share. There are 1 million shares outstanding. The firm is planning to raise $2 million to finance a new project. What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under the following scenarios?

a. Two shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Ex-rights stock price $

Value of a right $

Appropriate subscription prices $

b. Four shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Ex-rights stock price $

Value of a right $

Appropriate subscription prices $

c. Assume an investor holds 4 shares of stock. What is her portfolio value under each rights offer? (Do not round intermediate calculations.)

Two shares are required to purchase one additional share.

New portfolio value $

Four shares are required to purchase one additional share.

New portfolio value $

Summit Corp.'s stock is currently selling at $42 per share. There are 1 million shares outstanding. The firm is planning to raise $2 million to finance a new project. What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under the following scenarios? a. Two shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Ex-rights stock price Value of a right Appropriate subscription prices b. Four shares of outstanding stock are entitled to purchase one additional share of the new issue. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Ex-rights stock price Value of a right Appropriate subscription prices c. Assume an investor holds 4 shares of stock. What is her portfolio value under each rights offer? (Do not round intermediate calculations.) Two shares are required to purchase one additional share. New portfolio value Four shares are required to purchase one additional share. New portfolio value