A firm may sell its common stock directly to its existing stockholders through a _____.
A) private placement
B) cash offering
C) rights offering
D) direct placement

Question

Quizplus · Accepted Answer

A rights offering is when a company offers to sell more shares of its common stock directly to its existing stockholders at a discounted price. This allows existing stockholders to maintain their proportional ownership in the company without having to compete with outside investors in a public offering.

A Firm May Sell Its Common Stock Directly to Its