If a customer wishes to purchase 100 new shares through a rights offering and currently owns 50 shares, how many additional rights must she acquire?

In a rights offering, shareholders are typically given the right to buy additional shares at a specified price, often in proportion to the number of shares they already own. The number of additional shares a shareholder can purchase is determined by the rights allocated to them based on their existing holdings.

For this scenario, the customer currently owns 50 shares and wishes to purchase an additional 100 shares. To determine how many rights she needs to acquire, we first need to understand the ratio of rights that is involved in the offering.

Assuming that the rights offering allows existing shareholders the chance to purchase shares in a pro-rata manner, if the customer wants 100 new shares but only has rights for 50 shares, she would need to obtain enough additional rights to cover the desired purchase. The typical calculation involves knowing the total number of shares being offered compared to the number of existing shares held by current shareholders.

In this case, if each existing share represents a right to purchase one additional share, she would need to acquire enough additional rights to purchase a total of 100 new shares beyond her existing rights. If we assume the offering allows one existing share to purchase one new share, the calculation would lead to needing an additional 950 rights to reach her goal of purchasing 100