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
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
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 12P
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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
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Transcribed Image Text: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.)
Answer is complete but not entirely correct.
$ 20,459.29 X
Your proceeds from sale of rights
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