The greensborough corporation has announced a rights offer to raise 30 million for a new journal, the journal of financial excess. This journal will review potential articles after the author pays a nonrefundable reviewing fee of 5000 per page. the stock currently sells for 52 per share, and there are 3.9 millions shares outstanding
a) what is the maximum possible subscription price? what is the minimum?
b) If the subscripton price is set at 46 per share, how many share must be sold? how many rights will it take to buy one share?
c) What is the ex-rights price? what is the value of a right?
d) Show how a share holder with 1000 shares before the offering and no desire ( or money) to buy additional shares is not harmed by the rights offer?