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.

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Definitions:

Dying Role

A concept in sociology and psychology that examines how individuals who are terminally ill adjust and behave in anticipation of death.

Resiliency

The capacity to recover quickly from difficulties or adapt in the face of adversity, trauma, tragedy, threats, or significant sources of stress.

Loved One

A term used to describe someone whom an individual holds dear and has a deep affection for, often a family member or close friend.

Kübler-Ross's Stages

A theory outlining five stages of emotional and psychological response to grief and loss, often referred to as the "five stages of grief."