Value of a Right show that the value of a right just prior to expiration can be

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Value of a Right show that the value of a right just prior to expiration can be written as: Value of right = PRO – Px = (PRO – PS) / (N + 1) where PRO, PS and Px stand for the rights-on-price, the subscription price, and the ex-rights price, respectively, and N is the number of rights needed to but one new share at the subscription price.

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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