Question
help please !

Which of the following actions will provide the shareholders with the least total wealth when a company makes a rights offeri
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Answer

Exercise the rights and sell the shares

Other three options does not makes new shareholders.. But exercise the option and sell the shares makes new people become shareholders... .this will lead to least the existing wealth of individual holders .

Add a comment
Know the answer?
Add Answer to:
help please ! Which of the following actions will provide the shareholders with the least total...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • please help here Question 29 1 pts Suppose you own 40,000 shares of common stock in...

    please help here Question 29 1 pts Suppose you own 40,000 shares of common stock in a firm with 2 million total shares outstanding. The firm announces a plan to sell an additional 0.6 million shares through a rights offering. The market value of the stock is $34 before the rights offering and the new shares are being offered to existing shareholders at a $4 discount. What is the market value of the stock after the rights offering? $88.4 million...

  • Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares...

    Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. The firm announces a plan to sell an additional 1 million shares through a rights offering. The market value of the stock is $33 before the rights offering and the new shares are being offered to existing shareholders at a $3 discount. a. If you exercise your preemptive rights, how many of the new shares can you purchase? b. What is the market...

  • #4 Suppose you own 90,000 shares of common stock in a firm with 4.5 million total...

    #4 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. points eBook Print a. If you exercise your preemptive rights, how many of the new shares can you purchase? b....

  • Suppose you own 64.000 shares of common stock in a firm with 3.2 milion total shares...

    Suppose you own 64.000 shares of common stock in a firm with 3.2 milion total shares outstanding. The firm announces a plan to sell an additional 16 million shares through a rights offering, The market value of the stock is $33 before the rights offering and the new shares are being offered to existing shareholders at a $3 discount a. If you exercise your preemptive rights, how many of the new shares can you purchase? b. What is the market...

  • #1. Check my Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. The firm...

    #1. Check my Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. The firm announces a plan to sell an additional 1 million shares through a rights offering. The market value of the stock is $33 before the rights offering and the new shares are being offered to existing shareholders at a $3 discount. points eBook Print a. If you exercise your preemptive rights, how many of the new shares can you...

  • Need help figuring out these questions. please help! The shareholders of the Unicorn Company need to...

    Need help figuring out these questions. please help! The shareholders of the Unicorn Company need to elect 3 new directors. There are 1,000,000 shares outstanding. How many shares do you need to be certain that you can clect at least one director if, (a) Unicorn has straight voting? The shareholders of the Unicorn Company need to elect 3 new directors. There are 1,000,000 shares outstanding. How many shares do you need to be certain that you can elect at least...

  • Please answer all question with working and calculation. Tq Questions Leeward Co is proposing to raise...

    Please answer all question with working and calculation. Tq Questions Leeward Co is proposing to raise additional equity finance by means of a rights issue. There are currently om shares in issue with a par value of 50 cents (50.50) trading at $1.50 ex.div per share. The company will offer a share for every 5 shares already held at a 20% discount on the current market price. Issue costs can be ignored. Required: (a) Calculate the theoretical ex-rights price (TERP)...

  • V Hewlard Pocket's market value balance sheet is given. Assets A. Original balance sheet Liabilities and...

    V Hewlard Pocket's market value balance sheet is given. Assets A. Original balance sheet Liabilities and Shareholders' Equity Cash $ 150,000 Debt Other assets 950,000 Equity Value of firm $ 1,100,000 Value of firm Shares outstanding - 100,000 Price per share = $1,100,000 / 100,000 - $11 $ 1,100,000 $1,100,000 Pocket needs to hold on to $88,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $2.50 per Share and to replace cash as...

  • TR15-6 Rights (LO 15-5) Locomotive Co. decided to raise new equity using a rights offering and...

    TR15-6 Rights (LO 15-5) Locomotive Co. decided to raise new equity using a rights offering and on June 15 announced that it would issue one right for each share owned to existing shareholders. The company currently has 1,800,000 shares outstanding, which are priced at $45 per share. The subscription price is $30 and it will take four rights and the subscription price to purchase one share. On 30 June the 1,800,000 rights were issued. The rights expire on 31 July....

  • Hi! Can you please help me with these questions as my teacher did not provide the...

    Hi! Can you please help me with these questions as my teacher did not provide the answers. Thanks! A $2,000,000 bond was issued on September 15 2015 with a 5 year maturity. Coupon rate is 5.5% and the present YTM is 5.75% p.a. compounded half-yearly. Interest is paid semi annually. How much is the bond worth on 15 March 2018? a. $1,994,051.41 O b. $1,988,509.75 OC. $1,911,077.19 d. $2,011,531.45 e. $1,863,887.66 From highest to lowest, which financial assets are correctly...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT