The Closer the Subscription Price on a Rights Issue Is

question 35

Multiple Choice

The closer the subscription price on a rights issue is set to the market price of the share:

• A)the greater is the market value of the right.
• B)the smaller is the dilution in investors' wealth.
• C)the more likely that the rights issue will be fully subscribed.
• D)the greater is the need to have the issue underwritten.

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Definitions:

Non Sequitur

A conclusion or statement that does not logically follow from the previous statement or argument, presenting a disconnect in reasoning.

Conclusion

The final part of an argument, statement, or text where the outcome or decision is derived from the previously presented information or arguments.

Premises

Statements or propositions on which an argument is based or from which a conclusion is drawn.

Begging the Question

A logical fallacy in which the conclusion of an argument is assumed in the premise, essentially arguing in a circle.