Wuttke Corp. wants to raise $4.5 million via a rights offering. The company currently has550,000 shares of common stock outstanding that sell for $80 per share. Its underwriterhas set a subscription price of $40 per share and will charge the company a spread of 4percent.If you currently own 2,500 shares of stock in the company and decide not to participatein the rights offering, how much money can you get by selling your rights? (Do not roundintermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Sale proceeds

Right shares are issued to the existing shareholders to raise money required by company for growth…

Wuttke Corp. wants to raise $4.5 million via a rights offering. The company currently h 550,000 shares of common stock outstanding that sell for $80 per share. Its underwrit has set a subscription price of $40 per share and will charge the company a spread of percent. If you currently own 2,500 shares of stock in the company and decide not to participat in the rights offering, how much money can you get by selling your rights? (Do not roun intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Sale proceeds

Wuttke Corp. wants to raise $4.5 million via a rights offering. The company currently h 550,000 shares of common stock outstanding that sell for $80 per share. Its underwrit has set a subscription price of $40 per share and will charge the company a spread of percent. If you currently own 2,500 shares of stock in the company and decide not to participat in the rights offering, how much money can you get by selling your rights? (Do not roun intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Sale proceeds

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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Similar questions

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?
Disturbed Corp. needs to raise $53.5 million to fund a new project. The company will sell shares at a price of $23.00 in a general cash offer and the company's underwriters will charge a spread of 6 percent. The direct flotation costs associated with the issue are $550,000 and the indirect costs are $375,000. How many shares need to be sold? Multiple Choice 2,216,981 shares 2,209,803 shares 2,326,087 shares 2,517,345 shares 2,421716 shares
Nougat Corporation wants to raise $4.9 million via a rights offering. The company currently has 550,000 shares of common stock outstanding that sell for $50 per share. Its underwriter has set a subscription price of $25 per share and will charge the company a spread of 5 percent. If you currently own 3,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) I keep getting the wrong answer, I get $2,430 and its not correct, the answer 20130 is also not correct.
Todd Winningham IV has $5,700 to invest. He has been looking at Gallagher Tennis Clubs Inc. common stock. Gallagher has issued a rights offering to its common stockholders. Six rights plus $64 cash will buy one new share. Gallagher's stock is selling for $82 ex- rights. a-1. How many rights could Todd buy with his $5,700? (Do not round intermediate calculations and round your answer to the nearest whole number.) Number of rights a-2. Alternatively, how many shares of stock could he buy with the same $5,700 at $82 per share? (Do not round intermediate calculations and round your answer to the nearest whole number.) Number of shares b. If Todd invests his $5.700 in Gallagher rights and the price of Gallagher stock rises to $90 per share ex-rights, what would his dollar profit on the rights be? (First compute profit per right.) (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Dollar profit
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
Nougat Corporation wants to raise $4.9 million via a rights offering. The company currently has 550,000 shares of common stock outstanding that sell for $50 per share. Its underwriter has set a subscription price of $25 per share and will charge the company a spread of 5 percent. If you currently own 3,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) I keep getting the wrong answer, I get $2,430 and its not correct, the answer 20130 is also not correct, and the answer 20459.29 is also not correct
Atlas Inc. currently has 20 million shares outstanding. The current stock price is $35/share. The company has decided to do a rights issue. Every existing shareholder will be given 1 right for each share that they own. It will take 4 rights to buy one new share at a price of $25 per share. How much money will the company raise if all of the rights are exercised? Question 9 options: A) $700,000,000 B) $450,000,000 C) $500,000,000 D) $125,000,000 E) $105,000,000
Teasler Inc. currently trades at $40 and has 9 million shares outstanding with Net Income of $12 Million. The Board decides to use a rights offering to raise new capital. Each shareholder will receive one right for each share. Laila Sims currently owns 4,000 shares of Teasler stock. Four rights plus $34 cash are needed to buy one new share. The ex-rights date is in 30 days. a. What is the value of a right? b-1. How many of the new shares could Laila buy if she exercised all her rights? b-2. How much cash would this require? c. How many new shares is Teasler issuing and what are the proceeds? d. If the price of Teasler shares price moves to $30 what is the value of the right ( Assume still rights-on)
Prahm Corp. wants to raise $4.7 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $55 per share. Its underwriter has set a subscription price of $30 per share and will charge the company a spread of 6 percent. If you currently own 5,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Sale proceeds
Jenny Corporation needs to raise $46 million to fund a new project. The company will sell shares at a price of $27.60 in a general cash offer and the company's underwriters will charge a spread of 6.5 percent. The direct flotation costs associated with the issue are $575,000. How many shares need to be sold? Multiple Choice 1,666,667 shares 1,804,813 shares 1,735,740 shares 1,564,945 shares 1,615,806 shares
Hoobastink Mfg. is considering a rights offer. The company has determined that the ex- rights price will be $61. The current price is $68 per share, and there are 10 million shares outstanding. The rights offer would raise a total of $60 million. What is the subscription price?

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