Damron, Incorporated, has 225,000 shares of stock outstanding. Each share is worth $83, so the company's market value of equity is $18,675,000. Suppose the firm issues 52,000 new shares at the following prices: $83, $77, and $71. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share? (Leave no cells blank; if there is no effect select "No change" from the dropdown and enter "0". Round your answers to 2 decimal places, e.g., 32.16.) a. $83 b. $77 c. $71 Price Ex-Rights Effect Amount per share per share per share

Damron, Incorporated, has 225,000 shares of stock outstanding. Each share is worth $83, so the company's market value of equity is $18,675,000. Suppose the firm issues 52,000 new shares at the following prices: $83, $77, and $71. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share? (Leave no cells blank; if there is no effect select "No change" from the dropdown and enter "0". Round your answers to 2 decimal places, e.g., 32.16.) a. $83 b. $77 c. $71 Price Ex-Rights Effect Amount per share per share per share

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter26: Mergers And Corporate Control

Section: Chapter Questions

Problem 7MC

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