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United Ltd.s shares are currently trading at $51.50. United announced a rights offering that will distribute one right per share owned and 6 rights can
United Ltd.s shares are currently trading at $51.50. United announced a rights offering that will distribute one right per share owned and 6 rights can be used to purchase one share for $48.00.
a) What is the value of one right?
b) Immediately after the rights are issued, what is the expected market price of Uniteds shares? (The shares are trading rights off.)
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