What Are the Advantages of a Rights Offer Over a Cash

question 50

Multiple Choice

What are the advantages of a rights offer over a cash offer when issuing new shares?

• A) It enables a firm to attract new investors from outside its current owners.
• B) It enables a firm to issue equity without imposing a loss on current shareholders.
• C) It enables a firm to access new sources of capital to fund its growth.
• D) It enables a firm to attract new investors by offering them a windfall from the difference between the price of the issued stock and the price of stock after the offering.

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Definitions:

Deuterostomes

A grouping of animals characterized by their embryonic development; during the formation of the mouth and anus, the anus forms before the mouth.

Protostomes

A group of animals within the animal kingdom that develop the mouth before the anus during embryonic development, as part of the blastopore’s fate.

Spiral Cleavage

A type of early embryonic development found in some invertebrates, where cells divide at oblique angles to each other.

Deuterostomes

Deuterostomes are a major group of animals characterized by their embryonic development; in deuterostomes, the anus forms before the mouth during early embryogenesis.