A Pro-Rata Share Rights Offer of 1: 5 Gives Existing

question 68

Multiple Choice

A pro-rata share rights offer of 1: 5 gives existing shareholders:

• A) the right to purchase one new share for every five shares held.
• B) the right to purchase five new shares for every one share held.
• C) the right to purchase one share for every 1/5 shares held.
• D) the right to purchase 10 shares for every five shares held.

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Definitions:

Treasurer

An executive responsible for managing a company's investments, cash flow, financial planning, and related records.

Master Budget

A comprehensive financial planning document that consolidates all of a company's individual budgets relating to sales, cost of goods sold, operations, and capital expenditures into one overarching budget.

Sales Budget

A financial plan that estimates the expected sales revenue for a period, including units sold and revenue expected.

Cash Budget

A cash budget is a financial plan or forecast that outlines expected cash inflows and outflows over a specific period, helping businesses manage their cash flow.