Holden Corp. has announced a rights offer to raise $90,000,000 for a new journal, the Journal of Financial Excess. This journal will review potential articles after the author pays a nonrefundable reviewing fee of $9,000 per page. The stock currently sells for $125 per share, and there are 20,625,000 shares outstanding.
a) What is the maximum possible subscription price?
Maximum subscription price = $
b) If the subscription price is set at $48 per share, how many shares must be sold?
Shares must be sold =
c) With the $48 subscription price, how many rights will it take to buy one share?
Number of Rights =
d) What is ex-rights price?
Ex-rights price = $
e) What is the value of a right?
Value of a right = $