Valley Corp.'s stock is currently selling at $43 per share. There are 1 million shares outstanding. The firm is planning to raise $2 million to finance a new project. What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under the following scenarios?

a)Two shares of outstanding stock are entitled to purchase one additional share of the new issue.

Ex-rights stock price:

Value of a right:

Appropriate subscription price:

b)Four shares of outstanding stock are entitled to purchase one additional share of the new issue.

Ex-rights stock price:

Value of a right:

Appropriate subscription price:

c)	Assume an investor holds 4 shares of stock. What is her portfolio value under each rights offer?

Two shares are required to purchase one additional share.

New portfolio value:

Four shares are required to purchase one additional share.

New portfolio value: