The effect of a rights offering on a stockholder is Multiple Choice the right to sell stocks, in which the stockholder's wealth only increases if the stock is sold. the right to own more shares at a cheaper price, but the wealth of the stockholder's original shares goes down. the right to own more stocks, in which the stockholder's wealth increases only if the new stock is purchased. O the right to own more shares at a cheaper price, while the wealth of the stockholder's original shares goes up. What is the difference between the conversion value and conversion premium? Multiple Choice The conversion value is the total value received if converted and the conversion premium is the difference between the value that would be received and how much the bond is selling for. (0) The conversion value is the total value of what the bond is selling for and the conversion premium is the difference between the value that would be received and how much the bond is selling for. The conversion value is the total value received if converted and the conversion premium is the difference between the value that would be received and the par value of the stock. There is no difference since conversion value and conversion premium mean the same thing. A firm has $50 million in assets and its optimal capital structure is 60% equity. If the firm has $12 million in retained earnings available to invest, at what asset level will the firm need to issue additional stock? (Assume no growth in retained earnings.) Multiple Choice The firm should have already issued additional stock. There is insufficient information to determine an answer. The firm can increase assets by $30 million. O O The firm can increase assets by $20 million