An Investor Exercises the Right to Buy One Additional Share

question 65

Multiple Choice

An investor exercises the right to buy one additional share at $20 for every five shares held.How much should each share be worth after the rights issue if they previously sold for $50 each?

• A) $35.00
• B) $41.67
• C) $45.00
• D) $46.00

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Definitions:

Injunctive

Pertaining to an order or directive issued by an authority, often legal in nature, requiring specific actions to be taken or avoided.

Adjunctive

Supplementary or additional to something rather than being an essential part; often used in the context of treatments or activities that support a primary objective.

Conjunctive

Serving to connect or combine items logically, typically used in reference to words or phrases.

Paralinguistics

involves the non-verbal elements of communication such as tone of voice, loudness, and pitch, which contribute to the conveyance of meaning and emotion.