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What will happen to mec share price

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Reference no: EM133038055

Question - Rights issue. micro-Electronics Corporation (mEC) has just announced that it will issue 10 million shares of common stock through a rights issue at a subscription price of $20. Before the announcement, mEC shares were trading at $26, and there were 50 mil- lion shares outstanding.

a. How many rights will mEC grant to its existing shareholders?

b. How many rights will an investor need to buy one new share?

c. What will happen to mEC's share price when the rights issue is announced?

d. What should be the value of one right?

Reference no: EM133038055

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