You Would Like to Expand Your fiRm's Operations into a Neighboring

question 244

Multiple Choice

You would like to expand your firm's operations into a neighboring province but you need $4 million in additional funding to do this. After talking with your key shareholders, you decide to raise the
Necessary funds through a rights offering with a subscription price of $30 a share. The current
Market price of your stock is $38 a share. How many shares of stock will you need to sell through
The rights offering to fund your expansion plans?

• A) 105,263 shares
• B) 125,000 shares
• C) 133,333 shares
• D) 250,000 shares
• E) 500,000 shares