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Suppose you own 92,000 shares of common stock in a firm with 4.6 million total shares outstanding. The firm announces a plan to sell an additional 2.3 million shares through a rights offering. The market value of the stock is $33 before the rights offering and the new shares are being offered to existing shareholders at a $3 discount.

If you sell your rights rather than use them, how much money will you receive from the rights sale and what is the total value of your proceeds from the sale of the rights offering plus your investment in the firm? (Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161))

Sale of rights      ___________________$ million 

Total investment            __________________$ million  

Financial Management, Finance

  • Category:- Financial Management
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