Which One of the Following Statements Is Correct About a Rights

question 148

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:

Navigation Bar

A graphical interface element used in websites or applications for easy access to different sections or pages.

Beginning Record

The first entry or data point in a sequence or dataset, often used in database and data processing contexts.

Form View

A layout in database applications that allows users to view, enter, or edit data in a form that resembles a paper form.

Layout View

A mode in software applications, particularly in database and web development tools, that allows users to design or modify the layout of records or pages visually.