ABC Inc is currently trading at $8 per share and has 1.5 billion shares on issue. It announces a 3 for 7 renounceable rights issue with a subscription price of $6.5 per share. Which of the following statements related to the rights issue is correct, based only on the information above? ABC Inc is aiming to issue 0.2143 billion shares from the rights offer. More than one of the other statements related to the rights issue is correct. 999 Instead of exercising the right, shareholders can choose to sell the right to 1 new share for $1.05 on the exchange (ignore other pricing factors). The theoretical ex-rights price for ABC Inc. is closest to $7.55. None of the other statements related to the rights issue is correct.

ABC Inc is currently trading at $8 per share and has 1.5 billion shares on issue. It announces a 3 for 7 renounceable rights issue with a subscription price of $6.5 per share. Which of the following statements related to the rights issue is correct, based only on the information above? ABC Inc is aiming to issue 0.2143 billion shares from the rights offer. More than one of the other statements related to the rights issue is correct. 999 Instead of exercising the right, shareholders can choose to sell the right to 1 new share for $1.05 on the exchange (ignore other pricing factors). The theoretical ex-rights price for ABC Inc. is closest to $7.55. None of the other statements related to the rights issue is correct.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Drake Company has granted 200 share appreciation rights to each of its 300 employees on January 1, 2016. The rights are due to vest on December 31, 2017, with payment being made on December 31, 2018. During the year 2016, the company estimated that all options would vest, although only 90% of the options actually vested. Share prices are as follows: January 1, 2016. P20 December 31, 2016. 24 December 31, 2017. 27 December 31, 2018. 30 1. What liability will be recorded on December 31, 2016 as a result of the share appreciation rights? 2. How much compensation expense should be recorded for the year ended December 31, 2017?
The Windsor Corporation has 120,000 shares outstanding with a current market price of $8.10 per share. The company needs to raise an additional $36,000 to finance new expenditures and has decided on a rights issue. The issue will allow current stockholders to purchase one additional share for 20 rights at a subscription price of $6 per share. How many new shares must be issued? What will be the ex-rights stock price? If the ex-rights price were set at $7.90, would you as a potential new stockholder choose to buy shares ex-rights or buy shares at the old price and exercise your rights?
Wetterau, Incorporated, has announced a rights offer to raise $2.19 million. The company's stock currently sells for $77 per share, there are 165,000 shares outstanding, and one right will be granted for each outstanding share. The subscription price is set at $73 per share. What is the ex-rights price per share?
The Windsor Corporation has 120,000 shares outstanding with a current market price of $8.10 per share. The company needs to raise an additional $36,000 to finance new expenditures, and has decided on a rights issue. The issue will allow current stockholders to purchase one additional share for 20 rights at a subscription price of $6 per share. a) How many new shares must be issued? b) What will be the ex-rights stock price? c) If the ex-rights price were set at $7.90, would you as a potential new stockholder choose to buy shares ex-rights or buy shares at the old price and exercise your rights? d) Suppose that the company was also considering structuring the rights issue to allow for an additional share to be purchased for 10 rights at a subscription price of $3. Prove that a stockholder with 100 shares would be indifferent between purchasing a new share for 10 rights at $3 or purchasing a new share for 20 rights at $6. e) Why do you think the company chose a rights issue rather than a…
Eurofoam LLC issued 8,000 shares of OMR 10 each in order to procure a patent of latest technology developed by Oxfom LLC. The original cost of patent was OMR 82,000. The market values of the shares issued by Eurofoam LLC stood OMR 11.5 each. What shall be the value of patent in the books of Eurofoam LLC? None of them OMR 82,000 OMR 80,000 OMR 92,000 with a cost to date of OMR 63,500. It is expected that further
Hassinah, Incorporated, is proposing a rights offering. Presently, there are 800,000 shares outstanding at $48 each. There will be 160,000 new shares offered at $40 each. a. What is the new market value of the company? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. How many rights are associated with one of the new shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the ex-rights price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the value of a right? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. New market value b. Number of rights needed c. Ex-rights price d. Value of a right
Please explain in detail
Namjoon Corporation is authorized to issue 500,000 shares of Ordinary Share Capital, P50 par value. To comply with the required subscription of the Securities and Exchange Commission, assuming the minimum required subscription was received at P 110, how much subscription must be paid up?
Lovie Corporation stock sells at P78 a share with rights on. The subscription price is P60, and five rights are needed to purchase a new share of stock. What is the value of each right?
NEED ASAP. Solve correctly and show your computations. On March 1, 2021, Hans Corp. issued 1,000 shares of its P20 par value ordinary share and 2,000 shares of its P20 par value convertible preference share for a total of P80,000. At this date, Hans ordinary share was selling for P36 per share, and the convertible preference share was selling for P27 per share. What amount of the proceeds should be allocated to Hans’s convertible preference share?

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