Which of the Following Statements Is FALSE

question 9

Multiple Choice

Which of the following statements is FALSE?

• A)In a rights offer,the firm offers the new shares only to existing shareholders.
• B)Secondary shares are shares sold by existing shareholders,including the company's founder.
• C)If a firm's management is concerned that its equity may be underpriced in the market,by using a rights offering the firm can continue to issue equity without imposing a loss on its current shareholders.
• D)In the United States,most offers are rights offers.

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Definitions:

Tort Action

A lawsuit or legal claim brought forth as a result of a tort, aimed at recovering damages or seeking remedy for harm caused.

Defense

Reasons that a defendant offers in an action or suit as to why the plaintiff should not obtain what he or she is seeking.

Liability

Legal responsibility or obligation to another, enforceable by civil remedy or criminal punishment.

Proximate Cause

A legal concept that connects an individual's actions to the resulting harm or damage, indicating a direct link between the cause and effect.