Which of the Following Statements Is FALSE

question 5

Multiple Choice

Which of the following statements is FALSE?

• A) In a rights offer, a 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:

Supply and Demand Curves

Graphical representations in economics that illustrate the relationship between the supply of goods and services and their prices in the market.