When Securities Are Issued Under a Rights Issue

question 21

Multiple Choice

When securities are issued under a rights issue:

• A) existing shareholders have the opportunity to expand their holdings.
• B) shares are offered to the public at a discount.
• C) the existing shares will increase in price.
• D) current shareholders have the right to resell their stock to the issuer.

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Definitions:

Personal Nature

relates to characteristics or matters that are primarily concerning or affecting an individual rather than a broader group or organizational level.

Expressly Agree

To explicitly consent to or acknowledge something, typically in a clear and unequivocal manner.

Validly Assigned

Legally transferred or delegated to another party, in the context of rights, duties, or properties, in accordance with applicable laws and agreements.

Incidental Beneficiary

A third party who unintentionally benefits from a contract between two other parties, without having legal rights to enforce the contract's terms.