New Image Corporation has 1,000,000 shares outstanding. It wishes to issue 500,000 new shares using rights issue. How many rights are needed to buy one new share?
A) 1 right/share
B) 2 rights/share
C) 3 rights/share
D) 4 rights/share

Question

Quizplus · Accepted Answer

To calculate the number of rights needed to buy one new share, divide the number of existing shares by the number of new shares to be issued: 1,000,000 existing shares / 500,000 new shares = 2 rights per new share.

New Image Corporation Has 1,000,000 Shares Outstanding