Assuming Everything Else Is Constant, If a Stock's Old Price

question 6

Multiple Choice

Assuming everything else is constant, if a stock's old price is $25 and the ex-rights or new stock price is $19, then the value of the right is:

• A) $6.00.
• B) -$6.00.
• C) impossible to determine without the subscription price.
• D) impossible to determine without the number of rights needed to buy one share.

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Definitions:

Intuition

The ability to understand something instinctively, without the need for conscious reasoning, often involving quick and effective decision-making based on experience.

Logical Reasoning

Logical reasoning encompasses the ability to analyze a situation and come to a logical conclusion.

Biased

showing an unfair preference for or against something based on personal opinion.

Implicit Favorite

An unconsciously preferred choice or option among a set of alternatives, often influencing decision-making processes.