Miller Fruit Wants to Expand Its Citrus Grove Operations

question 48

Multiple Choice

Miller Fruit wants to expand its citrus grove operations.The firm estimates that it needs $8.6 million to buy land and establish its operations.Currently,the firm has 540,000 shares of stock outstanding at a market price per share of $34.80.If the firm decides to raise the needed capital through a rights offering,one right will be issued for each share of stock.The subscription price will be set at $33 a share.How many rights will a shareholder need to purchase one new share of stock in this offering?

• A)2.07 rights
• B)2.17 rights
• C)2.22 rights
• D)2.50 rights
• E)2.67 rights

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