The current market price of a company's shares is $20. The company is planning to make a 1 for 5 rights issue at a subscription price of $14. You hold 100 shares at the time the rights issue is to be made. What will the ex-rights share price be?   a. $16.67   b. $14.33   c. $19.00   d.$22.80

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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The current market price of a company's shares is $20. The company is planning to make a 1 for 5 rights issue at a subscription price of $14. You hold 100 shares at the time the rights issue is to be made. What will the ex-rights share price be?

 

a. $16.67

 

b. $14.33

 

c. $19.00

 

d.$22.80

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