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Accounting

Problem:

Roth Corp. wants to raise $4.6 million via a rights offering. The company currently has 560,000 shares of common stock outstanding that sell for $70 per share. Its underwriter has set a subscription price of $40 per share and will charge the company a spread of 2 percent.

Required:

Question: If you currently own 2,500 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights?

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166427

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