Question
XYZ Corporation needs to raise additional capital and is considering a rights issue to raise $5 million. There are currently 1,000,000 shares on issue, trading
XYZ Corporation needs to raise additional capital and is considering a rights issue to raise $5 million. There are currently 1,000,000 shares on issue, trading at $15.00. The company plans to increase the total number of shares on issue to 1,500,000. Calculate the theoretical ex-rights price and the value of a right.
| a. | $12.5, $2.5 | |
| b. | $18.25, $2.85 | |
| c. | $13.33, $1.67 | |
| d. | $15.00, $5.00 | |
| e. | $13.33, $3.33 |
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077328894, 71313974, 9780077395810, 77328892, 9780071313971, 77395816, 978-0077400163
