Participating in rights offering


Atlas Corp. wants to raise $4 million via a rights offering. The company currently has 450,000 shares of common stock outstanding that sell for $40 per share. Its underwriter has set a subscription price of $24 per share and will charge the company a 7 percent spread. Assume that you currently own 7,200 shares of stock in the company and decide not to participate in the rights offering. How much can you get for selling all of your rights?

A. $24,911.21

B. $25,362.84

C. $32,811.16

D. $25,792.19

E. $27,094.95

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Finance Basics: Participating in rights offering
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