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Which TWO of the following are true for an entity raising equity finance using a...

Which TWO of the following are true for an entity raising equity finance using a rights issue rather than a placing of equity shares to new investors?

A.

The administration is more complex and therefore likely to be more costly.

B.

The shares will sell at a higher price and therefore generate more funds.

C.

The voting rights of existing shareholders will be unaffected if the shareholders take up their rights.

D.

The cost of underwriting will be lower because the risk of the issue is lower.

E.

The issue will widen the base of shareholders if all shareholders take up their rights.

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