Answer:
Rights needed for each new share = 8.14 rights
Explanation:
Amount needed to expand = $1.6 million
465,000 shares of stock outstanding at a market price per share of $32.50
The subscription price = $28
Number of rights issued = 1 right per share × 465,000 shares
Number of rights issued = 465,000 rights
Number of shares needed = $1,600,000 / $28
Number of shares needed = 57,142.857
Rights needed for each new share = Number of rights issued / Number of shares needed
Rights needed for each new share = 465,000 / 57,142.857
Rights needed for each new share = 8.14 rights
