Jefferson Refining is issuing a rights offering wherein every shareholder will receive one right for each share of stock they own.The new shares in this offering are priced at $19 plus 3 rights.The current market price of the stock is $23 a share.What is the value of one right?
A)$0.25
B)$1.00
C)$1.25
D)$1.50
E)$2.00

Question

Quizplus · Accepted Answer

Value per share excluding right = [$19 + (3 × $23)]/(1 + 3) = $22.00Value of one right = $23 - $22.00 = $1.00

Jefferson Refining Is Issuing a Rights Offering Wherein Every Shareholder