Assuming Everything Else Is Constant,when an Equity Goes Ex-Rights Its

question 31

Multiple Choice

Assuming everything else is constant,when an equity goes ex-rights its price should:

• A)decrease since the shareholder is losing an option.
• B)increase since the corporation no longer has the right to force the shareholder to convert.
• C)remain the same since an efficient market would anticipate this change.
• D)move up or down depending on whether a small investor wanted to exercise his/his rights.
• E)None of the above.

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Definitions:

Integral Proteins

Proteins that are permanently attached to the membrane, serving various roles such as transport, cell adhesion, and functioning as enzymes.

Plasma Membrane

The semi-permeable membrane that surrounds the cytoplasm of a cell, controlling the movement of substances in and out.

Membrane-Bound Receptors

Proteins located on the cell surface involved in transmitting signals from the outside to the inside of the cell.

Receptor Sites

Specific locations on cell membranes or within cells where particular molecules, such as hormones or neurotransmitters, can bind and elicit a physiological response.