Stock purchased through a rights offering may carry lower margin requirements.

Name: Stock purchased through a rights offering may carry lower margin requirements.
Brand: Quizplus
Rating: 4.8 (58 reviews)

Question

Quizplus · Accepted Answer

This is because rights offerings typically come with a discounted price for existing shareholders, which may make the stock more attractive to investors and lower the risk for lenders. Lower margin requirements mean investors can borrow more money to purchase more stock, increasing their potential returns.

Stock Purchased Through a Rights Offering May Carry Lower Margin