To purchase a share in a rights offering, an existing shareholder generally just needs to:
A) pay the subscription amount in cash.
B) submit the required form along with the required number of rights.
C) pay the difference between the market price of the stock and the subscription price.
D) submit the required number of rights along with a payment for the underwriting fee.
E) submit the required number of rights along with the subscription price.

Question

Quizplus · Accepted Answer

To purchase a share in a rights offering, an existing shareholder generally needs to submit the required number of rights along with the subscription price. This is because the purpose of a rights offering is to give existing shareholders the opportunity to purchase additional shares at a discounted price. The subscription price is typically lower than the market price, which is why shareholders are incentivized to exercise their rights and purchase more shares.

To Purchase a Share in a Rights Offering, an Existing