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Frank Enterprises Is Sponsoring a Rights Offering Wherein Every Shareholder

Question 76

Multiple Choice

Frank Enterprises is sponsoring a rights offering wherein every shareholder will receive one right for every share of stock they own. The new shares in this offering are priced at $25 plus 5 rights. The current market price of Frank Enterprises stock is $31 a share. What is the value of one right?


A) $0.25
B) $.60
C) $1.00
D) $1.20
E) $1.50

Correct Answer:

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