Mr. and Mrs. Anderson own three shares of Magic Tricks Corporation's common stock. The market value...

Question

Question

Mr. and Mrs. Anderson own three shares of Magic Tricks Corporations common stock. The market value of the stock is $60. The c-2. If the Andersons participate in the rights offering, what will be the value of their portfolio, based on the diluted val

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

A 289 Part a 290 Value of a right = (Mo-5)/(N+1) 291 where 292 Mo - Cum rights price of the stock 293 S = exercise price unde

Add a comment

Answer 2

Similar Homework Help Questions

Mr. and Mrs. Anderson own three shares of Magic Tricks Corporation's common stock. The market value...

Mr. and Mrs. Anderson own three shares of Magic Tricks Corporation's common stock. The market value of the stock is $60. The Andersons also have $48 in cash. They have just received word of a rights offering. One new share of stock can be purchased at $48 for each three shares currently owned (based on three rights). (Do not round intermediate calculations and round your answers to the nearest whole dollar.) a. What is the value of a right? Value...
Mr. and Mrs. Anderson own five shares of Magic Tricks Corporation's common stock. The market value...

Mr. and Mrs. Anderson own five shares of Magic Tricks Corporation's common stock. The market value of the stock is $76. The Andersons also have $58 in cash. They have just received word of a rights offering. One new share of stock can be purchased at $58 for each five shares currently owned (based on five rights). (Do not round intermediate calculations and round your answers to the nearest whole dollar.) a. What is the value of a right? b....
Mr. and Mrs. Anderson own six shares of Magic Tricks Corporation's common stock. The market value...

Mr. and Mrs. Anderson own six shares of Magic Tricks Corporation's common stock. The market value of the stock is $70. The Andersons also have $56 in cash. They have just received word of a rights offering. One new share of stock can be purchased at $56 for each six shares currently owned (based on six rights). (Do not round intermediate calculations and round your answers to the nearest whole dollar.) a. What is the value of a right? b....

Mr and Mrs. Anderson own five shares of Magic Tricks Corporation's common stock. The market value...

Mr and Mrs. Anderson own five shares of Magic Tricks Corporation's common stock. The market value of the stock is $60. The Andersons also have $42 in cash. They have just received word of a rights offering. One new share of stock can be purchased at $42 for each five shares currently owned (based on five rights). (Do not round intermediate calculations and round your answers to the nearest whole dollar.) a. What is the value of a right? Value...
Mr. and Mrs. Tinker own a sizeable investment portfolio of stock in publicly held corporations. The...

Mr. and Mrs. Tinker own a sizeable investment portfolio of stock in publicly held corporations. The couple has four children—ages 20, 22, 25, and 27—with whom they want to share their wealth. Unfortunately, none of the children has demonstrated an ability to manage money. As a result, Mr. and Mrs. Tinker plan to transfer their portfolio to a new corporation in exchange for 20 shares of voting stock and 400 shares of nonvoting stock. They will give 100 nonvoting shares...
Mr. and Mrs. Tinker own a sizeable investment portfolio of stock in publicly held corporations. The...

Mr. and Mrs. Tinker own a sizeable investment portfolio of stock in publicly held corporations. The couple has four children—ages 20, 22, 25, and 27—with whom they want to share their wealth. Unfortunately, none of the children has demonstrated an ability to manage money. As a result, Mr. and Mrs. Tinker plan to transfer their portfolio to a new corporation in exchange for 20 shares of voting stock and 400 shares of nonvoting stock. They will give 100 nonvoting shares...

Mr. Z owned 200 shares of Corporation K common stock. During the current year, Mr. Z...

Mr. Z owned 200 shares of Corporation K common stock. During the current year, Mr. Z received distributions from Corporation K of $600 in cash dividends, 100 additional shares of K's common stock, and rights to purchase 100 more shares. The distributions were not disproportionate and the shareholders were not given an option to receive cash instead of the stock and stock rights. The fair market value of the total stock dividend shares and the total stock rights were $200...
just Excrcise 16: Relation of rights to EPS and the price-carnings ratio Walker Machine Tools has 7 million shares of common stock outstanding. The current market price of Walker common stock is S82 p...

just Excrcise 16: Relation of rights to EPS and the price-carnings ratio Walker Machine Tools has 7 million shares of common stock outstanding. The current market price of Walker common stock is S82 per share rights-on. The company's net income this year is $25 million. A rights offering has been announced in which 700,000 new shares will be sold at $76.50 per share. The subscription price plus seven rights is needed to buy one of the new shares. a. What...
help pleaseeee !! Walker Machine Tools has four million shares of common stock outstanding. The current...

help pleaseeee !! Walker Machine Tools has four million shares of common stock outstanding. The current market price of Walker common stock is $58 per share rights-on. The company's net income this year is $19 million. A rights offering has been announced in which 580,000 new shares will be sold at $52.5 per share. The subscription price of $52.5 plus 7 rights is needed to buy one of the new shares. (Do not round Intermediate calculations. Round the final answers...

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...

Mr. and Mrs. Anderson own three shares of Magic Tricks Corporation's common stock. The market value...

Homework Answers