Precise Machining Is Considering a Rights Offer

question 12

Multiple Choice

Precise Machining is considering a rights offer.The company has determined that the ex-rights price would be $46.The current price is $53 per share,and there are 7 million shares outstanding.The rights offer would raise a total of $70 million.What is the subscription price?

• A)$26.48
• B)$27.06
• C)$27.50
• D)$28.18
• E)$29.10

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Definitions:

Customer Lifetime Value

A prediction of the net profit attributed to the entire future relationship with a customer.

Relationship

The connection or association between individuals, groups, or entities, which can be professional, personal, or commercial in nature.

Relationship Selling

A sales approach focusing on building long-term relationships with customers, rather than on individual transactions, to foster loyalty and repeat business.

Multi-level Marketing

A strategy some direct sales companies use to encourage existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales.