Ariel and Todd both own rights on TL stock that grant each of them the right to purchase 10 shares at $15 a share.Ariel does not sell or exercise her rights.Thus,Todd purchases 20 shares at the subscription price.Todd exercised

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Todd exercised an oversubscription privilege, which allows existing shareholders to purchase additional shares (beyond their basic subscription rights) if not all the shares offered in a rights offering are bought by others. Since Ariel did not exercise her rights, Todd was able to purchase more shares than his initial entitlement.

Ariel and Todd Both Own Rights on TL Stock That