SIE Understanding Trading, Customer Accounts and Prohibited Activities Practice Question 55

Question: 55

Which of the following is a reason for the board of directors to approve a rights offer?

A. To provide another security's shares in exchange for the desired shares

B. To publicly announce an offer to purchase shares for a certain price if a minimum quantity of shares are provided in response to the offer

C. To replace old shares with new shares with twice the par value

D. To raise additional capital by offering current shareholders the opportunity to purchase the number of shares to maintain proportional ownership