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Suppose that the company was also considering structuring the rights issue to allow for an additional share to be purchased for 10 rights at a
Suppose that the company was also considering structuring the rights issue to allow for an additional share to be purchased for 10 rights at a subscription price of $3. Consider a shareholder owns 100 shares and hence obtains 100 rights. The current price of the stock is $8. How much he is willing to sale one share ex-right stock? And how much he is willing to sell one rights?
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