If the Subscription Price for a New Equity Issue Is

question 14

Multiple Choice

If the subscription price for a new equity issue is $15, and the ex-rights price of the stock is $20.5, and the old stock price is $22.5, then the number of rights needed to purchase a new share is:

• A) 2.0.
• B) 2.5.
• C) 2.75.
• D) 5.5.
• E) 7.5.

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Definitions:

Needy Friend

A friend who requires or demands excessive attention, support, or assistance.

Legal Offer

A proposal by one party to another intended to create a legally binding agreement upon acceptance.

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Printing devices that use a laser beam to transfer text and images to paper by selectively melting toner.

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An agreement which is legally binding and involves more than one party, enforceable by legal means.