A type of offering that allows existing shareholders to maintain their proportionate ownership of the firm is called a
A)rights offering.
B)general warrant.
C)preferred warrant.
D)Rule 415 offering.

Question

Quizplus · Accepted Answer

A rights offering is a type of offering where existing shareholders are given the right to purchase additional shares of the company at a discounted price in order to maintain their proportionate ownership. This type of offering is often used by companies to raise additional capital while also ensuring that current shareholders are not diluted. Therefore, choice A is the best answer as it accurately describes this type of offering. Choices B, C, and D are not relevant to the description provided. A rights offering allows existing shareholders to purchase additional shares at a discounted price in order to maintain their proportionate ownership of the firm. This type of offering is often used when a company needs to raise additional capital but wants to avoid dilution of ownership for existing shareholders. General warrants and preferred warrants are not types of offerings, and Rule 415 offerings are a type of shelf registration that allows a company to register and sell securities over a period of time.

A Type of Offering That Allows Existing Shareholders to Maintain