What is the expected stock price after rights are exercised

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Question: You are stockholder in a SmallTech Inc., a company that is planning to raise new equity. The stock is trading at $ 15 per share, and there are 1 million shares outstanding. The firm issues 500,000 rights to buy additional shares at $ 10 per share to its existing stockholders.

a. What is the expected stock price after the rights are exercised?

b . If the rights are traded, what is the price per right?

c. As a stockholder, would you be concerned about the dilution effect lowering your stock price? Why or why not?

Reference no: EM131690028

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