Business
Business, 24.08.2021 15:50, kcarstensen59070

Mr. and Mrs. Anderson own three shares of Magic Tricks Corporation's common stock. The market value of the stock is $70. The Andersons also have $58 in cash. They have just received word of a rights offering. One new share of stock can be purchased at $58 for each three shares currently owned (based on three rights). Required:
a. What is the value of a right?
b. What is the value of the Andersons’ portfolio before the rights offering?
c. Compute the diluted value (ex-rights) per share.
d. If they sell their two rights but keep their stock at its diluted value and hold on to their cash, what will be the value of their portfolio?

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Answers: 2

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Mr. and Mrs. Anderson own three shares of Magic Tricks Corporation's common stock. The market value...

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