Currently,M & S Inc.has 2 million shares outstanding selling at $70 a share.A rights issue will be made that allows 1 share to be purchased for every 5 shares currently held by stockholders for $40 each.Which one of the following is true?
A) The number of shares outstanding will fall to 1.6 million.
B) The firm will raise $13.33 million.
C) The stock price will fall to $65.
D) The total value of the firm will equal $124 million.
Correct Answer:
Verified
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