Alberto currently owns 2,500 shares of Southern Tools. He has just been notified that the company is issuing additional shares and he is being given a chance to purchase some of these shares prior to the shares being offered to the general public. What is this type of an offer called?

Question

Quizplus · Accepted Answer

This type of offer is called a "rights offer." It allows current shareholders to purchase additional shares before they are offered to the general public.

Alberto Currently Owns 2,500 Shares of Southern Tools