Both A and R are true, and R is the correct explanation of A
Both A and R are true, and R is not the correct explanation of A
A is true, but R is false
A is false but R is true
Answer is Right!
Answer is Wrong!
The correct answer is: A. Both A and R are true, and R is the correct explanation of A.
Rights shares are shares that are offered to existing shareholders in proportion to their existing shareholdings. This means that if a shareholder owns 100 shares in a company, they will be offered 100 new shares if the company issues rights shares.
Equity shareholders are the owners of a company. They are the ones who take the greatest risk in company finance, as they are the last to be paid out in the event of a liquidation.
Therefore, both A and R are true, and R is the correct explanation of A.
Here is a brief explanation of each option:
- A. Both A and R are true, and R is the correct explanation of A. This is the correct answer, as explained above.
- B. Both A and R are true, and R is not the correct explanation of A. This is not the correct answer, as R is the correct explanation of A.
- C. A is true, but R is false. This is not the correct answer, as R is true.
- D. A is false but R is true. This is not the correct answer, as A is true.