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Ivanhoe Energy has 650,000 shares outstanding at $61.45 each. The company expects to raise $7,500,000 via...

Ivanhoe Energy has 650,000 shares outstanding at $61.45 each. The company expects to raise $7,500,000 via a rights offering at a subscription price of $58.60. How many rights are required for each new share? 4.75 5.08 5.39 5.61 5.97

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Answer #1

New shares = Amount / subscription price

New shares = 7,500,000 / 58.60

New shares = 127,986.3481

number of rights needed = Old shares / new shares

number of rights needed = 650,000 / 127,986.3481

number of rights needed = 5.08

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