When the Exercise Price of a Rights Issue Is Lower

question 59

Multiple Choice

When the exercise price of a rights issue is lower than the market price of the shares,this is known as a:

• A) premium element.
• B) bonus element.
• C) discount element.
• D) reduced element.

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Definitions:

Subjectivity

The quality of being based on or influenced by personal feelings, tastes, or opinions rather than external facts.

Particular Culture

The specific set of values, traditions, and practices shared by a group of people distinguished by geography, ethnicity, or social characteristics.

Inferior

Lower in rank, quality, or status; below another in importance or position.

Indigenous Belief Systems

The complex of spiritual and cultural beliefs and practices that are native to a specific ethnic group or society.