SIE practice questionhardRights
If a shareholder does NOT exercise or sell their subscription rights during a rights offering, what will happen?
- AThey will get a refund for their unexercised rights
- BThey will automatically receive additional shares
- CTheir ownership percentage will be diluted✓ Correct answer
- DThey will lose all voting rights
Explanation
Why C — Their ownership percentage will be diluted
Unexercised rights mean others may purchase more, reducing the shareholder’s percentage. There is no automatic gift, refund, or loss of voting rights.
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