Knight inventory systems inc has announced a rights offer, Ask an Expert

Finance

Knight Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take Two rights to buy a new share in the offering at a subscription price of $57. At the close of business the day before the ex-rights day, the company’s stock sells for $75 per share. The next morning, you notice that the stock sells for $61 per share and the rights sell for $2 each.

What is the value of the stock ex rights? (Round your answer to 2 decimal places. (e.g., 32.16))

Stock ex rights $

What is the value of the rights?

Value of the rights $

Are the rights underpriced or overpriced?

(Click to select) Underpriced Overpriced

What is the amount of instant profit you can make on ex rights day per share?

Instant profit $

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91587683

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