If a shareholder or investor wants to acquire new equity under a rights plan they must:

Question

Quizplus · Accepted Answer

To acquire new equity under a rights plan, shareholders or investors must acquire the correct rights per share desired and turn the rights and the total subscription price into the subscription agent. This is because the purpose of the rights plan is to give existing shareholders the opportunity to purchase additional shares at a discounted price before they are offered to the general public. Option A is incorrect because acquiring a controlling fraction of shares is not necessary to be eligible for rights. Option B is incorrect because paying only a registration fee is not enough to acquire new equity. Option D is incorrect because the company may not automatically send you the shares without going through the proper procedure. Option E is unrelated to acquiring new equity under a rights plan.

If a Shareholder or Investor Wants to Acquire New Equity