Richardson Marina has 18,000 shares of stock outstanding that were sold to the general public last year.The firm has just decided to issue an additional 6,000 shares of common stock and has also decided to make the shares available to the firm's current shareholders before making any offer of these shares to the general public.Which one of the following terms best applies to this offer?

Question

Quizplus · Accepted Answer

This offer is a rights offer because the firm is making shares available to its current shareholders before offering them to the general public. This type of offer gives current shareholders the right to purchase additional shares at a discounted price before the general public is allowed to buy any remaining shares.

Richardson Marina Has 18,000 Shares of Stock Outstanding That Were