Red Shoe Co. has concluded that additional equity financing will be needed to expand operations and...

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Red Shoe Co. has concluded that additional equity financing willbe needed to expand operations and that the needed funds will bebest obtained through a rights offering. It has correctlydetermined that as a result of the rights offering, the share pricewill fall from $39 to $34.90 ($39 is the rights-on price; $34.90 isthe ex-rights price, also known as the when-issued price).The company is seeking $26 million in additional funds with aper-share subscription price equal to $20.
How many shares are there currently, before the offering?(Assume that the increment to the market value of the equity equalsthe gross proceeds from the offering.) (Do not roundintermediate calculations and round your answer to nearest wholenumber, e.g., 32.)

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Subscription price per share 20 Additional funds raised 26 million 26000000 No of shares issued through rights issue Additional funds raised Subscription price per share 26000000 20 1300000 shares Let x number See Answer

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Red Shoe Co. has concluded that additional equity financing willbe needed to expand operations and that the needed funds will bebest obtained through a rights offering. It has correctlydetermined that as a result of the rights offering, the share pricewill fall from $39 to $34.90 ($39 is the rights-on price; $34.90 isthe ex-rights price, also known as the when-issued price).The company is seeking $26 million in additional funds with aper-share subscription price equal to $20.How many shares are there currently, before the offering?(Assume that the increment to the market value of the equity equalsthe gross proceeds from the offering.) (Do not roundintermediate calculations and round your answer to nearest wholenumber, e.g., 32.)