FINRA Series 7 – General Securities Representative — Question 10

A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
What is the subscription price per share?

Answer options

Correct answer: D

Explanation

The subscription price per share is calculated by dividing the total capital to be raised ($10 million) by the number of new shares being offered (one million), resulting in $10 per share. The other options are incorrect as they do not reflect the correct calculation based on the intended capital raise.