Wilbert Engineering Is Considering a Large Seasoned Equity Offering

question 22

Multiple Choice

Wilbert Engineering is considering a large seasoned equity offering. If Bill, a current shareholder, does not participate in the offering he is most apt to:

• A) Suffer the effects of dilution.
• B) Lose his voting rights.
• C) Increase his proportionate ownership position.
• D) Benefit from an increase in value resulting from the offering.
• E) See the number of shares he owns increase while the value per share decreases.

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Definitions:

Gift Causa Mortis

A gift that is made in contemplation of one’s immediate death.

Contemplation

The action of looking thoughtfully at something for a long time or thinking about something deeply.

Probate

The judicial process in which a will is proven in a court of law to be valid or invalid, and the legal process of administering the estate of a deceased person.

Bailment Contract

An agreement where personal property is transferred from the bailor to the bailee for a specific purpose, with the expectation of return.