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SIE: Equity Securities
SIE practice questioneasyRights

Shareholders are sometimes offered rights, which give them the ability to:

  1. AReceive extra dividends.
  2. BVote twice in annual meetings.
  3. CPurchase new shares before the public at a set price.✓ Correct answer
  4. DSell shares back to the company at any time.
Explanation

Why CPurchase new shares before the public at a set price.

Rights let shareholders buy new shares before outsiders, protecting against dilution. They do not offer special voting, extra dividends, or a company buyback guarantee.

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