SIE practice questionhardRights
Which is true about stock rights issued to existing shareholders?
- AThey pay a fixed interest rate until expiration
- BThey are long-term instruments, similar to warrants
- CThey guarantee preemptive rights for bondholders
- DThey are often short-term and permit purchase below market price✓ Correct answer
Explanation
Why D — They are often short-term and permit purchase below market price
Stock rights are usually short-term and let shareholders buy new shares at a discount. Warrants are long-term; rights don’t apply to bondholders or pay interest.
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