Hickock, Inc., is proposing a rights offering. Presently there are 350,000 shares outstanding at $64 each. There will be 50,000 new shares offered at $58 each.
a) What is the new market value of the company?
b) How many rights are associated with one of the new shares?
c) What is the ex-rights price?
d) What is the value of a right?
e) Why might a company have a rights offering rather than a general cash offer?