A hypothetical corporation, Cascade Strategic & Innovative Solutions, has decided to raise capital through a rights offering. The company has 2,000,000 outstanding shares of stock with a market value of $55 per share. Cascade would like to raise an additional $15,000,000 in capital through a rights offering. The company will set the subscription price at $25 per new share. How many new shares will need to be issued? O approximately 272,728 shares O2,600,000 new shares O 5,000,000 new shares O 600,000 new shares
A hypothetical corporation, Cascade Strategic & Innovative Solutions, has decided to raise capital through a rights offering. The company has 2,000,000 outstanding shares of stock with a market value of $55 per share. Cascade would like to raise an additional $15,000,000 in capital through a rights offering. The company will set the subscription price at $25 per new share. How many new shares will need to be issued? O approximately 272,728 shares O2,600,000 new shares O 5,000,000 new shares O 600,000 new shares
Chapter3: The Financial Environment: Markets, Institutions And Investment Banking
Section: Chapter Questions
Problem 9PROB
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ANSWER:-
600,000 new shares
EXPLANATION:-
calculation of no. of shares:-
capital = $15,000,000
subscription price (discounted price) =$25
No. of shares =15,000,000/25
=600,000 shares
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