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:

Irrational Feelings

Emotions or sentiments that are not based on reason, logic, or actual experience, often leading to unpredictable or unreasonable reactions.

Achievement Drive

The inner motivation or desire of an individual to accomplish specific goals and excel in tasks.

High Need

A critical or urgent requirement for something that is essential or very important for an individual or entity.

External Locus

The belief that one's life events are primarily controlled by external forces or fate, rather than one's own efforts.