Student instructions: This worksheet is for problem 15-19. Information necessary to solve the problem is...
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Student instructions: This worksheet is for problem 15-19. Information necessary to solve the problem is listed below in the section marked "given." Enter formulas in the blanks where indicated to complete the calculations needed for Questions a through c. PROBLEM 15-19 Digicomm Rights Offering Given: Market Price of Common Stock Number of Common Shares outstanding Amount of new funds needed Net Income for the year Number of shares owned by Guy Hamilton $40 per share 600,000 $2,000,000 $1,000,000 10,000 Possible prices to be used in the analysis $36 $33 $29 $26 a. Number of shares to be issued and number of rights required: Assumed subscription price $36 $33 $29 $26 55,556 60,606 68,966 76,923 Number of shares to be issed Number of Rights required to buy one share b. EPS before and after the rights offering: EPS before the rights offering EPS after the rights offering c. Maximum number of shares Guy can buy and Guy's claims: Maximum number of new shares Guy can buy Guy's claim to earnings before the rights offering Guy's claim to earnings after the rights offering
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