rights issue allows shareholders to purchase shares below market value, it may not increase shareholder value"
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"Although a rights issue allows shareholders to purchase shares below market value, it may not increase shareholder value"
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- How is it possible for an employee stock option to be valuable even if the firms stock price fails to meet shareholders expectations?Discuss the following statement. Even when shares are sold at a discount, equity rights issues are fair while private placements are not fair.Which of the following statement about a rights issue is correct? a. The share price can be expected to increase on the ex-rights date b. On the ex-rights date the rights separate from the share c. The subscription price is usually greater than the market price d. A rights issue is offered to an investor whether they are an existing shareholder or not e. If you buy shares cum-rights you are not entitled to participate in the rights issue
- Which of the following statements is CORRECT? Select one: a. Conflict of interest between shareholders and managers is not possible. b. By definition, the agency problem can only take place in corporations but not in proprietorships and partnerships. c. Conflict of interest between shareholders and bondholders is not possible. d. Managers always work to maximize the long-run value, and therefore the price, of their company stocks. This is exactly what shareholders desire.Which of the following is NOT a characteristic of an ordinary share? a) The dividends are at the discretion of directors b) They give voting rights at meetings c) They are irredeemable d) Interest is accrued if the dividend is not paidOwners of preference shares often do not have: A Voting rights. B The right to sell their shares on the open market. C Preference to dividends. D Ownership rights to assets of the corporation.
- Do you believe that shareholders should always have the right to vote on a sale of the firm under any circumstances? Explain.How are shares issued at full market value treated differently from rights issues? Explain why it is?Are the statemnets: both correct, both incorrect, or which one is correct?STATEMENT 1: Share options are additional compensation on the part of officers and employees. STATEMENT 2: The intrinsic value of share options is equal to carrying amount over the option price.
- How do you determine if a stock is over-valued? What does that mean? If a willing buyer and a willing seller agree to buy/sell a share of stock, who can say if the share is over-valued? What are some of the traditional tools to determine if a stock is over-valued or under-valued?How is it possible for an employee stock option to be valuable even if the firm’s stock price fails to meet shareholder’s expectations?all of the following are true about the issuance of non-voting common stock except a. it has been issued when the corporation wishes to raise capital through the sale of common stock but does not want to relinquish its voting control o b. it has been issued as a defense against an unfriendly takeover c it tends to result in the dilution of voting rights of current stockholders od. it tends to result in unequal voting rights among the shareholders
