Alpha Geek

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    Polytechnic State University Sanluis
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Category > Accounting Posted 27 Jul 2017 My Price 7.00

Suppose you own 90,000 shares of common stock in a firm with 4.5 million total shares outstanding

Suppose you own 90,000 shares of common stock in a firm with 4.5 million total shares outstanding. The firm announces a plan to sell an additional 1.8 million shares through a rights offering. The market value of the stock is $35 before the rights offering and the new shares are being offered to existing shareholders at a $5 discount.
a.

If you exercise your preemptive rights, how many of the new shares can you purchase?

   

  New shares   
b.

What is the market value of the stock after the rights offering? (Enter your answer in millions rounded to 1 decimal place. (e.g., 32.1))

   

  Market value $  million

    

c-1.

What is your total investment in the firm after the rights offering? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16))

   

  Total investment $  million

Answers

Alpha Geek
(8)
Status NEW Posted 27 Jul 2017 07:07 AM My Price 7.00

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Attachments

file 1501141439-Answer.docx preview (259 words )
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