Luther Industries currently has 100 million shares outstanding at a price of $25 per share. The company would like to raise money and has announced a rights issue. Every existing shareholder will be sent one right per share that he or she owns. The company plans to require twenty rights to purchase one share at a price of $20 per share. The amount of money that Luther will raise through its rights offering is closest to

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Luther Industries will issue 5 million new shares (100 million shares / 20 rights per share). At $20 per share, they will raise $100 million (5 million shares * $20 per share).

Luther Industries Currently Has 100 Million Shares Outstanding at a Price