A Rights Issue Offers the Firm's Shareholders One New Share

question 76

Multiple Choice

A rights issue offers the firm's shareholders one new share of stock at $40 for every three shares of stock they currently own.What should be the stock price after the rights issue if the stock sells for $80 per share before the issue?

• A)$56.67
• B)$60.00
• C)$70.00
• D)$71.33 Post right - issue price =

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