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Berczy Inc. is proposing a rights offering. Currently there are 500,000 shares outstanding at $46 each. There will be 125,000 new shares offered at $38 each.

Berczy Inc. is proposing a rights offering. Currently there are 500,000 shares outstanding at $46 each. There will be 125,000 new shares offered at $38 each.

Essentials Of Investments
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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13) Can i please get help with this practice question.

Berczy Inc. is proposing a rights offering. Currently there are 500,000 shares outstanding at $46 each. There will be 125,000 new shares offered at $38 each. a. What is the new market value of the company? (Omit $ sign in your response.) New market value b. How many rights are associated with one of the new shares? Number of rights needed c. What is the ex-rights price? (Round the final answer to 2 decimal places. Omit $ sign in your response.) Ex-rights price $ d. What is the value of a right? (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Value of a right
Transcribed Image Text:Berczy Inc. is proposing a rights offering. Currently there are 500,000 shares outstanding at $46 each. There will be 125,000 new shares offered at $38 each. a. What is the new market value of the company? (Omit $ sign in your response.) New market value b. How many rights are associated with one of the new shares? Number of rights needed c. What is the ex-rights price? (Round the final answer to 2 decimal places. Omit $ sign in your response.) Ex-rights price $ d. What is the value of a right? (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Value of a right
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