________ Are Financial Instruments That Allow Stockholders to Purchase Additional

question 22

Multiple Choice

________ are financial instruments that allow stockholders to purchase additional shares at a price below the market price, in direct proportion to their number of owned shares.

• A) Rights offering
• B) Treasury stocks
• C) Preemptive rights
• D) Proxy statements

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Definitions:

Free Markets

An economic system in which prices are determined by unrestricted competition between privately owned businesses, without government intervention.

Efficiency

The optimal allocation of resources to produce the maximum amount of goods and services, with the least waste of resources.

Pareto Optimality

Pareto Optimality is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

Income Distribution

Income Distribution refers to the way in which total income is shared among the members of a society.