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:

Test Market

A geographic region or demographic group used to gauge the potential success of a product or service before a wider market launch.

Experimental Market

A market or test area where new products or services are introduced to measure consumer response and behavior.

Simulated Market

An artificial environment created for research, training, or testing, mirroring real-world market conditions without the economic risks.

Micro Market

A small, specific segment of a market with its own particular needs or preferences.