A rights offering (also called a privileged subscription) allows existing stockholders to _______.
A) purchase one new share of stock for every ten shares of stock they currently possess
B) purchase any shares of stock not sold to rights holders
C) sell existing shares of stock above market price
D) purchase new shares of stock below market price

Question

Quizplus · Accepted Answer

A rights offering allows existing shareholders to purchase new shares of stock at a price typically below the current market price, providing them an opportunity to maintain their ownership percentage without being diluted by the issuance of new shares.

A Rights Offering (Also Called a Privileged Subscription) Allows Existing