Lufuego Corporation has issued rights to its shareholders. The stock is selling for $26 rights-on and has a subscription price of $20. The company hopes to raise $1,000,000 to buy a new production facility. All 200,000 shareholders will receive one right each as part of the rights offering. What is the current value of the right?
$1.50
b.
There is not enough information to answer this question.
c.
$1.20
d.
$.97
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