To determine the value of a rights offering,the stockholder needs to know the following two pieces of information in addition to the current stock price:

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To determine the value of a rights offering, the stockholder needs to know the subscription price (the price at which they can exercise their rights to purchase new shares) and the number of rights needed to acquire a new share (how many rights they need to exercise to receive one new share of stock). The amount of new equity raised and the standby fee may be relevant information, but they do not directly impact the value of the rights offering to the current stockholder. The detachment date is also important but is not sufficient on its own to determine the value of the rights offering.

To Determine the Value of a Rights Offering,the Stockholder Needs