Big Box Retailing Has a Market Capitalization of $500 Million

question 90

Multiple Choice

Big Box retailing has a market capitalization of $500 million and 2 million shares outstanding.In order to finance its growth,the management of Big Box plans to raise further capital through a rights issue.All shareholders will be issued ten rights to purchase ten shares at a price of $1.50 per share.How much money will this raise,if all shareholders exercise their rights?

• A)$15 million
• B)$30 million
• C)$45 million
• D)$60 million

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Definitions:

LTL Carrier

A logistics service provider that transports smaller shipments not requiring a full truckload, often combining cargo from multiple customers.

Package Carrier

A company or service that specializes in the transport and delivery of parcels and packages.

Private Fleet

A company-owned collection of vehicles used to transport goods, as opposed to hiring external transportation services.

Inventory Cost

The total cost associated with holding and managing inventory, including storage, insurance, taxes, opportunity costs, and depreciation.