The situation where current shareholders have the opportunity to purchase new shares first is called
A) private placement.
B) rights offering.
C) competitive bid.
D) best efforts.

Question

Quizplus · Accepted Answer

The situation where current shareholders have the opportunity to purchase new shares first is called a rights offering. Private placement involves the sale of new securities directly to a small group of investors, while competitive bid refers to a process where multiple buyers submit prices to purchase an asset. Best efforts represents an underwriting agreement where the underwriter does not guarantee the sale of securities.

The Situation Where Current Shareholders Have the Opportunity to Purchase