The ZYX Corporation has a new rights offering, you can buy one share of stock with 3 rights and $20 per share. The stock is now selling ex-rights for $26. The value of the right and the price rights-on are:

Question

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The value of a right is calculated as [(Price ex-rights) - (Subscription price)] / (Number of rights needed to buy one share + 1). Here, it is ($26 - $20) / (3 + 1) = $6 / 4 = $1.50. However, since none of the options match this calculation directly and considering the possible mistake in the question or options provided, the closest match and the principle for calculating the price rights-on (which is the sum of the ex-rights price and the value of a right) seems to be misunderstood in the options. The correct calculation for the value of a right should indeed be based on the formula given, but with the options provided, it seems there's an error in the interpretation. The price rights-on would be the ex-rights price plus the value of the right, which ideally would be $26 + $1.50 = $27.50, not matching any options directly. Given the options, A) $2.00, $22.00 seems to be chosen based on a misunderstanding or a typo in the question or answer choices. The correct approach to find the value of a right and the price rights-on involves using the formula and the given data correctly, which doesn't directly match any of the provided choices.

The ZYX Corporation Has a New Rights Offering, You Can