The Lagrange Point Co. has proposed a rights offering. The stock currently sells for $40 per share. Under the terms of the offer, stockholders will be allowed to buy one new share for every five that they own at a price of $25 per share. What is the value of a right? What is the ex-rights price? You can buy five rights on shares for 5 ×$40 =$200 and then exercise the rights for another $25. Your total investment is $225, and you end up with six ex-rights shares. The ex- rights price per share is $225/6=$37.50. The rights are thus worth $40 -37.50=$2.50 apiece.