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Jen owns 7,500 of the 480,000 shares of TC Inc. The company has just announced a rights offering whereby 75,000 shares are being offered at a subscription price of $12 a share. The current stock price is $16 a share. Assume she sells her rights and that all rights are exercised. What percentage of the firm will she own after the rights offering?

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Answer:1.35%

Explanation:

From the question, we are informed that Jen owns 7,500 of the 480,000 shares of TC Inc and that the company has just announced a rights offering whereby 75,000 shares are being offered at a subscription price of $12 a share and that the current stock price is $16 a share.

Based on the above information, the new ownership percentage will be:

= 7500 / (480,000 + 75,000)

= 7500/555000

= 0.0135

= 1.35%

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