Question

What are the advantages to a company of selling stock in a seasoned equity offering? (SEO) using a cash? offer? What are the advantages of a rights? offer? Distinguish between a cash offer and a rights offer when selling stock in a seasoned equity? offering:???(Select all of the choices that? apply.)

A. A cash offer is used when a company offers the new shares to? investors-at-large.
B. A rights offer is used when the new shares are offered only to existing shareholders.
C. A cash offer is used when the new shares are offered only to existing shareholders.
D. A rights offer is used when a company offers the new shares to? investors-at-large.

Answer 1

A seasoned equity offering (SEO) allows a company to raise capital by selling additional stock to the public. Cash offers attract new investors and increase the company's market capitalization, while rights offers reward existing shareholders and maintain their ownership percentage.

Step-by-step explanation:

A seasoned equity offering (SEO) is a way for a company to raise capital by selling additional stock to the public. There are two types of offerings: cash offers and rights offers. In a cash offer, the new shares are offered to investors-at-large, while in a rights offer, the new shares are offered only to existing shareholders.

The advantages of a cash offer include the ability to attract new investors and increase the company's market capitalization. This can provide the company with financial capital for expansion and growth.

The advantages of a rights offer include the ability to reward existing shareholders and maintain their ownership percentage in the company. It also allows the company to raise capital without diluting the ownership of existing shareholders.