Series 79 practice questioneasyTypes of Offerings
Which type of offering gives existing shareholders transferable rights to buy additional shares, usually at a subscription price below market?
- ARights offering✓ Correct answer
- BInitial public offering
- CBought deal
- DPrivate investment in public equity
Explanation
Why A — Rights offering
Rights offering A rights offering preserves existing holders’ opportunity to avoid dilution by purchasing new shares proportionately. Because the rights are often transferable, shareholders can either exercise or sell them.
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