The Disadvantage of a Rights Offering Is

question 13

Multiple Choice

The disadvantage of a rights offering is

• A) current shareholders are not protected against dilution.
• B) the firm has a built-in market of knowledgeable investors.
• C) distribution costs are higher than a public offering.
• D) all of the other answers are correct

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Definitions:

Referral Selling

A sales strategy where existing customers are encouraged to refer new clients or customers to a business, often incentivized with rewards.

Door-to-Door Sales

The direct selling of goods or services to consumers at their homes or places of residence.

Abuses

The improper use or treatment of someone or something, often to unfairly or improperly gain benefit.

Cooling-Off Period

A statutorily defined period during which purchasers in door-to-door sales may change their minds and rescind a contract.