Bell Hill Mfg. is considering a rights offer. The company has determined that the ex-rights price would be $78. The current price is $100 per share, and there are 25 million shares outstanding. The rights offer would raise a total of $50 million. What is the subscription price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Respuesta :

Answer:

The price of subscription = 6.5

Explanation:

ex rights price = (current price × shares outstanding + amount raised) ÷ (current shares + amount raised/subscription price)

78 = (100×25+50) ÷ (25+50/Subscription price)

The price of subscription = 6.5