Five rights are necessary to purchase one share of Fogel stock at $45. A right sells for a $5. The ex-rights value of Fogel stock is_______.
To find the ex-rights value of Fogel stock, you need to understand the concept of ex-rights and how it affects the stock's value.
Ex-rights refers to the price of a share of stock after it has been stripped of any attached rights or options. In this case, you have been given information about the number of rights necessary to purchase one share of Fogel stock and the price of each right.
To calculate the ex-rights value, you need to consider the original value of the stock before the rights were attached. Here's the calculation:
Original stock price = (Price of stock with rights + (Number of rights x Price per right))
Given information:
Price of stock with rights = $45
Number of rights = 5
Price per right = $5
Ex-rights value = ($45 + (5 x $5))
Ex-rights value = ($45 + $25)
Therefore, the ex-rights value of the Fogel stock is $70.