Company wishes to raise$1.0 million in common equity financing using a rights offering. The Company has 500,000 shares of common stock outstanding that have recently traded at $25 to $28 per share. The Company believes that if the subscription price is set at $25, the shares will be fully subscribed. (i) Define the term Rights Offering (ii) Determine the number of new shares the Company must sell to raise the desired amount of capital. (iii) How many shares will each right entitle a holder of one share to purchase? (iv)If Clive who holds 5000 shares of National Gas Company exercises his rights, how many additional shares can he purchase?(v) What is the theoretical value of a right if the current market price is $27 with rights and the subscription price is $25. Show your calculations for both stock selling with rights and stock selling ex-rights. (vi) Approximately how much could Clive get for his rights immediately after the stock goes ex- rights?