PELLYKW6A5Problems2

# PELLYKW6A5Problems2 - a b c d e \$47,220,000.00 5.625 \$89.09...

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a. \$47,220,000.00 b. 5.625 c. \$89.09 d. \$0.91 e. A rights offering usually costs less, it protects the proportionate interests of existing shareholders and also protects against underpricing

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For \$80: [5 (80) + 80] / 6 = 80 The alternating offering price would have no affect on the existing price per share. For \$75: [5 (80) + 75] / 6 = 79.17 = 80 - 79.17 = 0.83 The alternating offering price causes a drop of 0.83 on the existing price per share.
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## This note was uploaded on 02/12/2012 for the course MBA 551 taught by Professor Smith during the Spring '11 term at Indiana Wesleyan.

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PELLYKW6A5Problems2 - a b c d e \$47,220,000.00 5.625 \$89.09...

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