Which One of the Following Statements Is Correct About a Rights

question 32

Multiple Choice

Which one of the following statements is correct about a rights offering?

• A) If the rights are selling at a price equal to their actual value, then a shareholder will neither win nor lose by selling their rights.
• B) If the market price of a right is less than the actual value of the right, then shareholders can gain by selling their rights in the open market.
• C) When the market price of a right is equal to the actual value of the right the shareholders will gain by exercising their rights.
• D) If the market price of a right is greater than the actual value of the right, then shareholders can gain by purchasing additional rights in the marketplace and exercising those rights.
• E) If both the market price of the right and the market price of the stock are underpriced compared to their ex-right values, then an investor is guaranteed a profit if they purchase additional rights.

---

Definitions:

Myelin Sheath

A fatty layer that encases the axons of many neurons, serving to speed up electrical impulses between nerve cells.

Axon

The long, slender projection of a nerve cell, or neuron, that conducts electrical impulses away from the neuron's cell body.

Neural Impulse

A signal transmitted along a nerve fiber, typically in response to a stimulus, leading to action or communication between different parts of the body.

Neurotransmitters

Chemical messengers that transmit signals across synapses from one neuron to another in the brain and nervous system.