Please show all work with formulas Do not use Microsoft Excel because I need to

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Please show all work with formulas

Do not use Microsoft Excel because I need to see the formulas in order to understand the question

Our instructor does not teach us with Microsoft Excel

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5. Hickock, Inc., is proposing a rights offering. Presently there are 800,000 shares outstanding at $48 each. There will be 160,000 new shares offered at $40 each. a. What is the new market value of the company? (Do not round intermediate calculations.) New market value b. How many rights are associated with one of the new shares? (Do not round intermediate calculations.) Number of rights needed c. What is the ex-rights price? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Ex-rights price d. What is the value of a right? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Value of a right

Explanation / Answer

1)New market value = (Total old share value+ New share value)/(Number of old shares + Number of new shares)

Old share value = Number of shares outstanding* Price per share = 800000*48 = 38400000

New share value = Number of new shares*Price per share= 160000*40 = 6400000

New market value = (38400000 + 6400000)/(800000 +160000) = 44800000/960000

= 46.66666

2) how many rights

Formula = Number of old shares / Number of new shares

= 800000/160000 = 5 Rights

3) Ex Rights price

It is the price that prevails after the right issues.The old price of the stock is 48 but the ex Rights price is 46.66

4) Value of one right

=( Old stock price - new stock Price)/(number of rights +1)

= (48 - 40)/(5+1) = 8÷6 = 1.33

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