The statement concerning a rights issue that is true is:
A) The shares are generally offered at above the current market price of the existing shares.
B) The issue is often made to ensure that new shareholders are brought into the company.
C) The cost of the issue tends to be less than making a share issue to the general public.
D) A and C are true.

Question

Quizplus · Accepted Answer

Rights issues are typically offered at a discount to the current market price to encourage existing shareholders to buy more shares, and they are generally cheaper than public offerings due to lower marketing and underwriting costs.

The Statement Concerning a Rights Issue That Is True Is