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Rights Offerings [LO4] Big Time, Inc., is proposing a rights offering. Presently there are 500,000 shares outstanding at $81 each. There will be 60,000 new shares offered at $70 each.

What is the new market value of the company?

How many rights are associated with one of the new shares?

What is the ex-rights price?

What is the value of a right?

Why might a company have a rights offering rather than a general cash offer?

Basic Finance, Finance

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