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(Solution Download) Mitsi Inventory Systems, Inc., has announced a rights offer. The company has announced that it will


 

 

 

 

 

 

 

Mitsi Inventory Systems, Inc., has announced a rights offer. The

 

company has announced that it will take three rights to buy a new

 

share in the offering at a subscription price of $53. At the close

 

of business the day before the ex-rights day, the companyAc??cs stock

 

sells for $80 per share. The next morning, you notice that the

 

stock sells for $65 per share and the rights sell for $2 each.

 

 

 

 

 

 

 

 

What is the value of the stock

 

ex-rights? (Do not round intermediate calculations. Round

 

your answer to 2 decimal places (e.g., 32.16).)

 

 

 

 

 

 

 

 

  Stock

 

price ex rights

 

$   

 

  

 

 

 

 

 

 

 

What is the value of one right?

 

Calculate your answer based on the actual ex-rights price.

 

(Do not round intermediate calculations.)

 

  

 

 

 

 

 

 

 

 

  Value of one

 

right

 

$   

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Are the rights underpriced or

 

overpriced?

  (Click to

 

select)UnderpricedOverpriced

 

  

 

 

 

 

 

 

 

 

What is the amount of instant profit you can make on ex-rights

 

day per share?

 

 

 

 

 

 

 

 

 

  Instant profit

 

$   

 

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