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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.

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AURORKA [14]

Answer:

c. Reward power

Explanation:

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4 0
3 years ago
I need help with this, struggling <br> no links please!! <br><br> The subject is Economics/Business.
svet-max [94.6K]

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The answer is producers need to know what consumers want so they can sell more and make more profit.

8 0
2 years ago
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Norma-Jean [14]

Joe decided to start washing cars on his street. The other kids in the neighborhood noticed Joe was making a lot of money washing cars and decided to open their own car wash. When they opened their own car wash, the equilibrium price decreased and the equilibrium quantity increased.

The price at which the quantity provided and demanded are equal is referred to as the equilibrium price. It is established by where the demand and supply curves cross. If more goods or services are produced than are needed to satisfy demand at the going rate, there is a surplus, which pushes prices lower.

Reduced demand will result in a drop in the equilibrium price and a reduction in supply. With everything else remaining constant, an increase in supply will result in a decrease in the equilibrium price and an increase in the amount required. The equilibrium price will increase as the supply declines, while the quantity needed will go down.

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8 0
1 year ago
A firm can effectively use its operations function to yield competitive advantage through all of the following except
ira [324]

Answer:

The correct answer is b.setting equipment utilization goals below industry average.

Explanation:

A firm cannot achieve competitive advantage by setting its equipment utilization goals as this will not retain its customers.

If a firm wants to achieve competitive advantage it can achieve it by;

Addressing its customers concerns and customizes the products according to their needs.  

Providing customers their ordered products earlier than other companies lead time, which means increase in speed of delivery and shortens the delivery time.

Bring improvement and advancements in its products by using new technology.

Maintain a variety of different product options to cater the needs of its various customers. Offering them a wide range of products will probably reduce chances of customer switch.

4 0
3 years ago
In the context of labor markets, _____ consists of all persons who are actually evaluated for selection.
zvonat [6]

Answer: a. the applicant pool

Explanation:

When a job is announced, people are told to apply for it and send in their resumes so that the company hiring can look through them.

The applicant pool refers to everyone that applied for that job and so sent in their resume. They will all be evaluated for the position in question to see if they fit and the better qualified or preferred candidates will then be called in for an interview.

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