Seaports United wants to raise $35 million through a rights offering to build a new seaport on the east coast. How many shares of stock will the firm need to sell through the rights offering if the current stock price is $47 a share and the subscription price is $42 a share?

Question

Quizplus · Accepted Answer

To raise $35 million at a subscription price of $42 a share, the firm needs to sell $35,000,000 / $42 = 833,333.33 shares. Since the number of shares must be whole, rounding up gives 833,334 shares.

Seaports United Wants to Raise $35 Million Through a Rights