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How much profit can you create from arbitrage transactions

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Reference no: EM133099849

Question - Nova Inc. has announced a rights offer that will take 6 rights to buy a new share in the offering at a subscription price of $25. The current price per share is $39. Assume that immediately following the ex-rights date the stock is selling for $37 per share and the rights are selling for $1.50 each. How much immediate profit can you create from arbitrage transactions?

Reference no: EM133099849

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