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Calculate the value of a right at the present time

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Smelly Kat Industries, a public company, wishes to raise $25 million for product line expansion. Because the existing shareholders are excited by the company's prospects, a rights offering will be used to raise the necessary capital. Each of the 5 million shareholders will receive one right. The subscription price is $25.00 per share, and the market price of the existing shares is currently $30.00.

Calculate the value of a right at the present time

Reference no: EM132579750

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