Suppose you own $100,000$ shares of common stock in a firm with $12\mathrm{.}5$ million total shares

outstanding. The firm announces a plan to sell an additional $2\mathrm{.}5$ million shares through a

rights offering. The market value of the stock is $$22\mathrm{.}50$ before the rights offering and the

new shares are being offered to existing shareholders at a $$2\mathrm{.}40$ discount.

a$.$ If you exercise your preemptive rights, how many of the new shares can you purchase?

b$.$ What is the market value of the stock after the rights offering?

c$.$ What is your total investment in the firm after the rights offering? How is your

investment split between original shares and new shares?

d$.$ If you decide not to exercise your preemptive rights, what is your investment in the firm

after the rights offering? How is this split between old shares and rights?