Before making a rights issue,a company's management must consider several important variables.Which of the following is NOT one of these variables?

Question

Quizplus · Accepted Answer

The effect on the firm's profits is one of the important variables that a company's management must consider before making a rights issue. Therefore, option D is NOT the correct choice. A, B, and C are important variables that need to be considered, as the company needs to ensure that it can service the increased equity, evaluate the costs of alternative funding sources, and confirm that there will be a sufficient take-up rate of the issue.

Before Making a Rights Issue,a Company's Management Must Consider Several