A public offering of securities where existing shareholders of the ﬁrm have the ﬁrst opportunity to buy the new securities, exclusive from the general public, is called a:

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A rights offer is a type of public offering where existing shareholders of the firm have the first opportunity to buy the new securities, exclusive from the general public. The other options refer to different types of public offerings: 
- A best efforts offer is when the underwriter agrees to use its best efforts to sell the securities, but does not guarantee a certain amount will be sold 
- A firm commitment offer is when the underwriter agrees to purchase all the securities from the issuer and then resell them to the public 
- A general cash offer is when the securities are offered to the general public without any exclusive rights given to existing shareholders 
- A red herring offer is another term for a preliminary prospectus, which contains the basic details of the offering but is not yet complete.

A Public Offering of Securities Where Existing Shareholders of the ﬁRm