Assuming Everything Else Is Constant, When a Stock Goes Ex-Rights

question 2

Multiple Choice

Assuming everything else is constant, when a stock goes ex-rights its price should:

• A) decrease since the investor who purchases the shares is losing an option.
• B) increase since the corporation no longer has the right to force the stockholder to convert.
• C) remain the same since an efficient market would anticipate this change.
• D) increase since the investor who purchases the shares is gaining an option.

Recognize the importance of opportunity cost in economic decision-making.

Grasp the foundational aspects of economic theory and the economic way of thinking.

Understand the distinction between positive and normative economic statements through examples.

Analyze the role and influence of assumptions in economic theory.

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Definitions:

360-Degree Feedback

A performance appraisal method where an employee is evaluated by feedback from supervisors, peers, subordinates, and sometimes clients.

Appraisal

The evaluation or assessment of something's value, significance, or condition, often in the context of emotional responses or stress.

Feedback

Information or responses given back to the originator, often used for improvement or as a guiding mechanism in various processes.

Performance Evaluations

The assessment and review of an employee's work performance, typically conducted on a regular basis by supervisors or managers.