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Nemesis, Inc., has 250,000 shares of stock outstanding. Each share is worth $88, so the company’s...

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Finance

Nemesis, Inc., has 250,000 shares of stock outstanding. Eachshare is worth $88, so the company’s market value of equity is$22,000,000. Suppose the firm issues 62,000 new shares at thefollowing prices: $88, $82, and $76.

What will be the ex-rights price and the effect of each of thesealternative offering prices on the existing price per share?(Leave no cells blank; if there is no effect select "Nochange" from the dropdown and enter "0". Round your answers to 2decimal places, e.g., 32.16.)

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4.2 Ratings (567 Votes)
Old share price of Nemesis Inc 88 per share Number of share outstanding 250000 shares Therefore Market Value of shares prior to issue of new shares 88 250000 22000000 Number of share for new right issue 62000    See Answer
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Nemesis, Inc., has 250,000 shares of stock outstanding. Eachshare is worth $88, so the company’s market value of equity is$22,000,000. Suppose the firm issues 62,000 new shares at thefollowing prices: $88, $82, and $76.What will be the ex-rights price and the effect of each of thesealternative offering prices on the existing price per share?(Leave no cells blank; if there is no effect select "Nochange" from the dropdown and enter "0". Round your answers to 2decimal places, e.g., 32.16.)

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