Let's break down the problem step by step: ### **1. Amount to be Raised** Haven Corporation wants to raise **$6,500,000**. ### **2. Subscription Price** Subscription price per share = **$25** ### **3. Number of New Shares to be Issued** \[ \text{Number of new shares} = \frac{6,500,000}{25} = 260,000 \] ### **4. Number of Existing Shares** Currently outstanding = **575,000** ### **5. Rights Needed to Buy One New Share** \[ \text{Rights needed to buy one new share} = \frac{575,000}{260,000} = 2.21 \] ### **6. Value of a Right (Theoretical Value of a Right - TERP Method)** #### **Ex-rights price (TERP):** \[ \text{TERP} = \frac{(\text{Old Shares} \times \text{Old Price}) + (\text{New Shares} \times \text{Subscription Price})}{\text{Total Shares after Offering}} \] \[ \text{TERP} = \frac{(575,000 \times 57) + (260,000 \times 25)}{575,000 + 260,000} \] \[ = \frac{32,775,000 + 6,500,000}{835,000} \] \[ = \frac{39,275,000}{835,000} = 47.04 \] #### **Value of One Right:** \[ \text{Value of one right} = \frac{\text{Old Price} - \text{TERP}}{\text{Number of rights needed to buy 1 new share} + 1} \] But typically, value per right is: \[ \text{Value per right} = \frac{\text{Old Price} - \text{TERP}}{\text{Number of old shares} / \text{Number of new shares} + 1} \] But since 2.21 old shares are needed for 1 new share, each old share gets 1 right. Alternatively, the value of a right per old share: \[ \text{Value per right} = \frac{\text{Old Price} - \text{TERP}}{\text{Number of old shares per new share}} \] \[ = \frac{57 - 47.04}{2.21} = \frac{9.96}{2.21} = 4.51 \] ### **7. Money from Selling Rights (for 5,000 shares)** \[ \text{Total money} = 5,000 \times 4.51 = \$22,550.68 \] --- ## **Final Answer** **You can get $22,550.68 by selling your rights.**