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Homework answers / question archive / Calculate the number of rights to buy one share, given the following information: $3 per value of each right; subscription price of $9; $20 common share price during the rights-on
Calculate the number of rights to buy one share, given the following information: $3 per value of each right; subscription price of $9; $20 common share price during the rights-on
Computation of Number of Rights:
Number of Rights = [(Share Price - Subscription Price)/Value of a right] - 1
= [($20 - $9)/$3] - 1
= [$11/$3] - 1
= $3.67 - 1
Number of Rights = $2.67