In a Rights Offering,the Shares Are Priced at a Substantial

question 67

True/False

In a rights offering,the shares are priced at a substantial discount to current market value,which ensures that the shareholders will either exercise the rights themselves or sell them to other investors.

---

Definitions:

Inelastic Demand

A market situation where the demand for a product does not significantly change with a change in price.

Elastic Demand

A market condition where the demand for a product or service significantly changes in response to price changes.

Opportunity Cost

The cost of a missed opportunity; the value of the best alternative forgone.

Direct Price Discrimination

A pricing strategy where a seller charges different prices to different customers for the same product or service, based directly on the willingness to pay.