A Stock Sells for $50 Rights-On,the Subscription Price Is $40

question 37

Multiple Choice

A stock sells for $50 rights-on,the subscription price is $40.Nine rights are required to purchase one share.The value of a right is:

• A) $1.00.
• B) $10.00.
• C) $1.11.
• D) $5.00.

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Definitions:

Marginal Tax

The additional tax paid on an additional dollar of income, used in progressive tax systems to tax higher incomes at higher rates.

Proportional

A relationship or ratio between two quantities where they change at the same rate.

Tax Rate

The proportion of income that a person or business must pay in taxes.

Digressive

Characteristics of a process or system that decreases in intensity or rate as it progresses.