The lower the ____________, the greater is the share price _________ of a rights offering.

Select one:

a.ex-rights price; decline

b.rights-on price; decline

c.subscription price; decline

d.ex-rights price; increase

e.subscription price; increase

Yonkers Inc. is issuing new common shares in a rights offer to raise $10 million for a new project. The subscription price for each new share is $20. The firm currently has two million common shares outstanding, each priced at $25 in the market. What is the price of each right?

Select one:

a.$1

b.$2

c.$5

d.$10

e.$15

Yonkers Ltd. is issuing 500,000 new shares in a rights offer. The company wants to ensure that the ex-rights share price is $60. Before the rights offer, the company has twomillion shares outstanding. If the rights were each priced at $10, what is the subscription price?

Select one:

a.$15

b.$20

c.$25

d.$30

e.$35

Abacus Corporation needs to raise $20 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $48 per share and the company's underwriter charges an 8% spread, how many shares need to be sold?

Select one:

a.452,899

b.571,429

c.617,143

d.621,118

e.675,128

Which of the following isnota type of dilution?

Select one:

a.dilution of percentage ownership

b.dilution of market value

c.dilution of book value

d.dilution of share price

e.dilution of earnings per share

Zanders Inc. is issuing new shares in a rights offer to raise $10 million for a new project. The subscription price for each new share is $20. The company has two million outstanding common shares and a share price of $25. If the company's investment dealer charges a 6% underwriting spread on the rights offer, what is the percentage flotation cost on the net proceeds? (Round your answer to two decimal places.)

Select one:

a.5.26%

b.6.00%

c.6.38%

d.7.32%

e.7.68%