Use this information to answer the following two questions: A firm needs to raise $3 million. It will raise the funds by offering 300,000 rights, each of which entitles the owner to buy 1 new share. The company currently has one million shares outstanding priced at $30 each.

1-What must be the subscription price on the rights the company plans to offer?

$11

$12

$10

$13

2- What will be the stock price following the exercise of the rights?

$21.36

$26.87

$22.41

$25.38