Currently,you own 5.4 percent of the outstanding stock of Keiffer Industries.The firm has decided to issue additional shares of stock and has given you the first option to purchase 5.4 percent of those additional shares.Which one of the following will you be participating in if you opt to purchase the shares you have been offered?

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The option given to purchase additional shares that corresponds to the percentage of outstanding stock that the investor currently owns is called a rights offer. Therefore, in this scenario, the investor will be participating in a rights offer. The other options listed are not applicable in this scenario. A red herring offer is an initial prospectus filed with the SEC by a company before proceeding with an IPO, a private placement is a sale of securities to a small number of selected individuals or institutions, an IPO is the first sale of stock by a private company to the public, and a general cash offer is a public offering of securities in which anybody can participate.

Currently,you Own 5