T Inc. currently has 100 million shares of stock outstanding at a price of $25 per share. The company would like to raise money and has announced a rights issue. For every 20 shares held by shareholders, the company plans to offer one share at a price of $20 per share.

a. What is the percent discount the company is offering with new shares?

b. How much money will T Inc.raise?

c. What is the firm value after the issue?

d What is the stock price after the issue?

e What is the primary benefit of a right offer?