Big Box Retailing Has a Market Capitalization of $500 Million

question 11

Multiple Choice

Big Box retailing has a market capitalization of $500 million and 4 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 $1.00 per share. How much money will this raise, if all shareholders exercise their rights?

• A) $20.0 million
• B) $40.0 million
• C) $60.0 million
• D) $80.0 million

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Definitions:

Drinking Limit

The maximum amount of alcohol a person is advised to consume in a given period to minimize health risks.

Alcohol Misuses

The consumption of alcohol in a manner that negatively affects the drinker's health, personal relationships, or social standing.

Classical Conditioning

A method of learning whereby a response originally produced by the second of two repeatedly associated stimuli is ultimately provoked by the first stimulus on its own.

Hypodermic Needle

A thin, hollow needle used for injecting substances into the body or extracting fluids from it.