Series 7 - General Securities Representative Exam

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A corporation wishes to raise additional capital. Which of the following might the corporation do?

Split the stock 2:1
A
Split the stock 1:2
B
Call in their convertible bonds
C
Offer existing shareholders a rights distribution
D

Explanations

Forward splitting or reverse splitting would not bring in capital. Calling in the convertible bonds would actually cost the corporation money. By offering rights, existing shareholders could purchase shares at a discount and bring new capital into the corporation.

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