
a)
To find: The company’s new market value.
Introduction:
The present or the newly quoted price for the market traded securities is the new market value. The new market value is mostly referred to as the price of the asset.
b)
To find: The number of rights that are associated with one of the shares
Introduction:
The public issue of securities, in which the securities are generally at an initial stage, offered to the owners or the existing shareholders of the company is a right offer. In the rights offering every shareholder of the company gets one right for each share the rights offer owns.
c)
To find: The price of the ex-rights.
Introduction:
The shares of the traded stock that no longer have the rights attached to it because they might have expired, been exercised, or transferred to another investor is an ex-right shares.
d)
To find: The value of a right
Introduction:
The mathematically computed value of the subscription right after the announcements of the offering and before the expiration of the rights is the value of rights.
e)
To find: The reason for the company to have a rights offering instead of a general cash offer
Introduction:
The cash offer is a type of public issue that makes the availability of the shares to the general public in an initial public offering.

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Chapter 15 Solutions
Fundamentals of Corporate Finance
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