The Effect of a Rights Offering on a Stockholder Is

Multiple Choice

The effect of a rights offering on a stockholder is

A) the right to sell stocks, in which the stockholder's wealth only increases if the stock is sold.
B) the right to own more stocks, in which the stockholder's wealth increases only if the new stock is purchased.
C) the right to own more shares at a cheaper price, while the wealth of the stockholder's original shares goes up.
D) the right to own more shares at a cheaper price, but the wealth of the stockholder's original shares goes down.