A. In order to solve this question, we need to determine the value of the right when it is selling rights-on. This is done using the following formula:

   Po - Pn

Vr= --------------------------

             r + 1

Where:

Po = The value of a share with the rights still attached

Pn = The subscription (sales) price of a share

r = The number of rights needed to buy a new share

Vr = The value of the right

Putting the values into the formula, we calculate that the value of one right is

   10 - 9

Vr= -------------------------- = .0909

             10 + 1   

B. This is simply the current market price of the share of stock.

C. This is the value of the 10 rights that will be required to purchase a new share of stock.

D. This answer is incorrect. See the correct answer for a complete explanation.