What is the ex-rights value of Fogel stock and how is it calculated?
The ex-rights value of Fogel stock is $113. To calculate the ex-rights value of Fogel stock, we need to subtract the price of the right from the current stock price. The price of one share of Fogel stock is $43, and one right sells for $7. Since ten rights are necessary to purchase one share, the total cost of the rights to purchase one share is 10 x $7 = $70.
Understanding Ex-rights Value of Fogel Stock
Ex-rights value is a crucial concept in finance that refers to the value of a stock after rights have been distributed to existing shareholders. In the case of Fogel stock, the ex-rights value is $113. This value is calculated by adding the stock price to the total cost of rights needed to purchase one share.
Calculation of Ex-rights Value
To calculate the ex-rights value of Fogel stock, we follow the formula:
Ex-rights value = Stock price + Cost of rights
Substituting the values:
Ex-rights value = $43 + $70 = $113
Therefore, the ex-rights value of Fogel stock is $113, indicating the worth of the stock after considering the cost of acquiring rights.
It is essential to understand the ex-rights value of a stock as it helps investors make informed decisions regarding their investments. By knowing the ex-rights value, investors can assess the true value of a stock and make strategic choices to maximize their returns. In the case of Fogel stock, the ex-rights value of $113 provides a clear picture of its value in the market.