Southern Tier Express Has 6 Million Shares Outstanding at a Market

Southern Tier Express has 6 million shares outstanding at a market price as of today, July 25, of $18 a share. They also have a $40 million rights offering at a subscription price of $10, a record date of
July 15, and a market price of $3.10 per right. Janet currently owns 100 shares of Southern Tier
Express stock. Which one of the following actions should Janet take if she feels bearish about the
Stock for the long-term?

A) Purchase 300 additional rights on the open market, exercise all of her rights, and then sell all of her shares on the open market.
B) Sell her 100 shares ex-rights plus sell her rights on the open market
C) Sell her shares cum-rights in the open market
D) Sell her rights on the open market and retain her 100 shares of stock
E) Do nothing with the rights offering.