1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
hoa [83]
3 years ago
6

Knight Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take five rights to buy a n

ew share in the offering at a subscription price of $33. At the close of business the day before the ex-rights day, the company’s stock sells for $54 per share. The next morning, you notice that the stock sells for $44 per share and the rights sell for $2 each. What is the value of the stock ex-rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)What is the value of a right?
Are the rights underpriced or overpriced?
What is the amount of immediate profit you can make on ex-rights day per share?
Immediate profit $
Business
1 answer:
s344n2d4d5 [400]3 years ago
5 0

Answer:

1) What is the value of a right?

value of a right = (stock price - right subscription price) / number of rights needed to buy a share

value of a right = ($54 - $33) / 5 = $21 / 5 = $4.20

2) Are the rights underpriced or overpriced?

the rights are underpriced because they are sold at $2 each, and their fair price is $4.20

3) What is the amount of immediate profit you can make on ex-rights day per share?

you buy 5 rights and use them to buy one stock at $33, total cost = (5 x $2) + $33 = $43. Immediately sell the stock at $44, and you can earn $1 per stock.

You might be interested in
What is a reason people might travel, other than going to visit friends/relatives?
Juli2301 [7.4K]

Answer: Another reason people might travel is maybe for a vacation or get away or people also might travel for their work.

Explanation:

4 0
3 years ago
Read 2 more answers
Các yếu tố môi trường ảnh hưởng đến ?
natali 33 [55]

Answer:

hejejeusuusywtwnjwiadeahagstahshhshsh shshhshshshshwjwjywywhywuehshsgzjjsgsgshshsjgsgsgshshhsusjsgjsjsjsgsnshysjshfssjg a.c juduuzysuhshsksiaiuwystsia isah sfajaitakawtaiwistdhxnsjishdysyausishzhhzgzgsuhsjshahshsnshzhz

Explanation:

hsjsjsjsjsuuwywuwuwjwusysusnshshshsueuueydjsnzhuzusis7w6wuuwuwjsjjsjxjsjsjeuuehehshsuaoyssyysydydysyshhzshhshshshsusuusueywgahsjusbxvxbcbjduudhyeuuzhbkjgisgnhdh esx scca dh scca exhjdjddjdhdhhdhhdhshdgdhdhshsjhwywhehehshhshshshshshshshysyeyeuggsushshhshshshsgsgdggdgdgdhdysjjszbbdes trasando ksdjjdndbxhxxzhdfdrdes d to love

5 0
3 years ago
How does immigration not lead to poverty?
Ira Lisetskai [31]

Answer:

Poverty rates and median family income

Indeed, the poverty rate of recent immigrants is more than twice that of U.S. natives. Because of this, at any point in time, the poverty rate would most certainly be lower in the absence of immigration. Also, increasing the immigrant share will raise the poverty rate.

Explanation:

have a great day

7 0
3 years ago
The Securities and Exchange Commission: Multiple Choice verifies the accuracy of the information contained in the prospectus. pu
nasty-shy [4]

Answer:

reviews registration statements to ensure they comply with current laws and regulations.

Explanation:

The Securities and Exchange Commission (SEC) is a governmental agency saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in a country.

In the United States of America, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America. It has the power to propose securities rules and regulations, and enforce federal securities law in the securities market.

<em>Hence, Securities and Exchange Commission reviews registration statements of bond issuers, investment advisers etc, to ensure they comply with current laws and regulations.</em>

5 0
3 years ago
During its first year of operations, a company granted employees vacation privileges and pension rights estimated at a cost of $
lorasvet [3.4K]

Answer:

The total cost of vacation pay and pension rights to be recognized the first year is $0

Explanation:

The vacations are expected to be taken the following year for which the vacation pay would be made and the pension rights are expected to be paid over the next 5-30 years. So, no cost is recognized in the first year

5 0
3 years ago
Other questions:
  • A manager is holding a $1.2 million stock portfolio with a beta of 1.01. She would like to hedge the risk of the portfolio using
    6·1 answer
  • A __________ describes the minimum qualifications a person must have to perform the job successfully.
    15·1 answer
  • 18a + 12x − 12a + 15x
    13·2 answers
  • List three things you can do to improve job satisfaction
    13·2 answers
  • A master budget​ ________. A. is only prepared for manufacturers as they are the only type of company with material purchases an
    10·1 answer
  • Jessica is a U.S. Army Reservist and in 2019 traveled 130 miles each way to serve duty at a local military installation. She was
    7·1 answer
  • What is contract theory
    7·2 answers
  • Describe the type of bond investment program you think the Shuman family should follow. In answering this question, give appropr
    15·1 answer
  • By its very nature, ____________ requires an understanding of human behavior to help managers better comprehend behaviors at dif
    14·1 answer
  • An agreement to purchase goods and services with a specified percentage of proceeds from an original sale in that country from a
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!