a)
To find: The maximum and minimum subscription price.
Introduction:
The price at which the present shareholders of the company are authorized to purchase the common stock in a rights issue is a subscription price.
b)
To find: The number of the shares that must be sold and the number of rights that it will take to purchase a share. The subscription price is $43 for a share.
Introduction:
The unit of ownership of a company is generally referred to as a share. The number of shares for each shareholder of the company differs.
c)
To find: The price of the ex-rights and the value of a right
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 are ex-right shares. 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.
d)
To show: The rights offer does not harm the shareholder with 1,000 shares before the offering; he had no intention of purchasing an additional share
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.
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