The management of LTTP Corp. is preparing for issuing equity to fund a new project. Rights offer is used. The company has determined that the ex-rights price would be $53. The current price is $58 per share, and there are 10 million shares outstanding. The rights offer would raise a total of $45 million. What is the subscription price?
The management of LTTP Corp. is preparing for issuing equity to fund a new project. Rights offer is used. The company has determined that the ex-rights price would be $53. The current price is $58 per share, and there are 10 million shares outstanding. The rights offer would raise a total of $45 million. What is the subscription price?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The management of LTTP Corp. is preparing for issuing equity to fund a new project. Rights offer
is used. The company has determined that the ex-rights price would be $53. The current price is $58
per share, and there are 10 million shares outstanding. The rights offer would raise a total of $45
million. What is the subscription price?
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