Knight Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take Two rights to buy a new share in the offering at a subscription price of $57. At the close of business the day before the ex-rights day, the company’s stock sells for $75 per share. The next morning, you notice that the stock sells for $61 per share and the rights sell for $2 each.
What is the value of the stock ex rights? (Round your answer to 2 decimal places. (e.g., 32.16))
Stock ex rights $
What is the value of the rights?
Value of the rights $
Are the rights underpriced or overpriced?
(Click to select) Underpriced Overpriced
What is the amount of instant profit you can make on ex rights day per share?
Instant profit $