Problem

Rights A company’s stock currently sells for $63 per share. Last week the firm issued righ...

Rights A company’s stock currently sells for $63 per share. Last week the firm issued rights to raise new equity. To purchase a new share, a stockholder must remit $12 and three rights.

a.What is the ex-rights stock price?


b.What is the price of one right?


c.When will the price drop occur? Why will it occur then?

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