Decide not to participate in rights offering

Assignment Help Financial Management

Reference no: EM131353001

Wuttke Corp. wants to raise $4.3 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $55 per share. Its underwriter has set a subscription price of $30 per share and will charge the company a spread of 6 percent.

If you currently own 6,000 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.)

Sale proceeds:

Reference no: EM131353001

Questions Cloud

Compute the value of stock with required return : A firm is expected to pay a dividend of $2.25 next year and $2.55 the following year. Financial analysts believe the stock will be at their price target of $100 in two years. Compute the value of this stock with a required return of 11.2 percent. (Do..

What is the maximum annual lease payment : Wolfson Corporation has decided to purchase a new machine that costs $4.5 million. The machine will be depreciated on a straight-line basis and will be worthless after four years. The corporate tax rate is 30 percent. The Sur Bank has offered Wolfson..

Compute the value of stock with required return : A firm is expected to pay a dividend of $2.85 next year and $3.00 the following year. Financial analysts believe the stock will be at their price target of $55 in two years. Compute the value of this stock with a required return of 12.8 percent.

The bond is treated as an original issue discount bond : A newly issued 10- year maturity, 5% coupon bond making annual coupon payments is sold to the public at a price of $810. The bond will not be sold at the end of the year. The bond is treated as an original issue discount bond. What will be an investo..

Decide not to participate in rights offering : Wuttke Corp. wants to raise $4.3 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $55 per share. Its underwriter has set a subscription price of $30 per share and will charge the compan..

About the subscription price : Hoobastink Mfg. is considering a rights offer. The company has determined that the ex-rights price will be $89. The current price is $95 per share, and there are 25 million shares outstanding. The rights offer would raise a total of $40 million. What..

Is this a discount or premium bond : Compute the price of a 6.3 percent coupon bond with 15 years left to maturity and a market interest rate of 10.4 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places...

Initial investment for proposed capital expenditure : Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm has total current assets of $ 913 comma 000 and total current liabilities of $ 641 comma 000. Explain why a change in these current ac..

Research one developing nation of your choice : Research one developing nation of your choice. Your research should include an examination of lending institutions, health care, and human capital.

User Account

All Pages