Calculate the ex-right stock price, Finance Basics

DIY Inc. plans to raise $200,000 with a right offering. The current stock price is $100 and there are 80,000 shares outstanding.

 a. If DIY sets the subscription price to be $80 and one right will be issued for each outstanding share, calculate the ex-right stock price and the value of a right.

 b. Repeat part a if the subscription price is $10.

 c. If DIY wants the ex-right stock price to be $50, what must be the subscription price? 



Posted Date: 2/28/2013 12:01:32 AM | Location : United States

Related Discussions:- Calculate the ex-right stock price, Assignment Help, Ask Question on Calculate the ex-right stock price, Get Answer, Expert's Help, Calculate the ex-right stock price Discussions

Write discussion on Calculate the ex-right stock price
Your posts are moderated
Related Questions
Determine how much of a total loan payment applies towards principal and how much applies towards interest for a home mortgage of $177,219 with a fixed APR of 7.5% of 20 years

Political Factors and Technological Factors - Investment Decisions i) Political factors - Under conditions of political uncertainty, that decisions cannot be completed as it

Functions of Central Depository System or CDS 1. Immobilization of securities that is removal of physical movement of securities. 2. Dematerialization that is removal of ph

Consider a binomial model of a risky asset with the parameters r = 0:06, u = 0:059, d = 0:0562, S 0 = 100, T = 1, 4t = 1=12. Note that u and d are monthly effective rates of retur

Advantages of Using Debt Finance Interest on debt is a tax permit able expense and as that it is reduced via the tax allowance. The cost of debt is fixed regardless of

Illustrate in brief about the Investment  Process A  typical  investment  decision  undergoes  a  five  step  procedure which, in turn, forms the foundation of investment pr

on may 1, counts, inc has a balance of $1000 in office supplie. during may the company buys $500 more of the office supplies. on may 31 the company counts the supplies and finds 20

What are the Advantages of placement Placement has the below benefits: (i) Timing of issue is significant for successful floatation of shares. In a depressed market cond

Debt Finance in US of Small Companies Why It CAN Be Difficult For Small Companies to Raise Debt Finance in US Lack of safety avoidances of finances available

Solution to the Agency Conflict The government can acquire the following actions to protect itself and its interests. 1. Acquire monitoring costs E.g. the gover