Ask Question
BusinessBusiness
12 December, 16:20

The preemptive right is important to shareholders because it a. allows managers to buy additional shares below the current market price. b. is included in every corporate charter. c. protects the current shareholders against a dilution of their ownership interests. d. protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate. e. will result in higher dividends per share.

+5
Answers (2)
  1. 12 December, 16:32
    0
    c. protects the current shareholders against a dilution of their ownership interests.

    Explanation:

    Preemtive rights of a shareholder is the right of a current shareholder to buy a certain amount of future shares that will be issued by the company. For example if an individual owns 10,000 shares in a company, and the company want to issue 100,000 more shares. The shareholder may have a right to by extra 10,000 shares of the new issue.

    This guarantees that old shareholder's ownership interests are not diluted.
  2. 12 December, 16:42
    0
    C. protects the current shareholders against a dilution of their ownership interests.

    Explanation:

    Preemptive rights are rights given to shareholders in an organization allowing them to buy additional shares in any future issue in order to maintain their percentage ownership, before the shares are available to the general public. It guards against dilution or decrease in a shareholders stake or ownership interest buy allowing them buy more shares for future issues before it is available for the general public to own shares. In doing so, shareholders avoid involuntary dilution.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The preemptive right is important to shareholders because it a. allows managers to buy additional shares below the current market price. b. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
some companies, such as alphabet, have created classes of stock with no voting rights at all. why would investors buy such stock
Answers (1)
internal control of cash receipts, Jodi rostad works at the drive-through window of mamma's burgers. Occasionally, when a drive-through customer orders, jodi fills the order and pockets the customer's money.
Answers (1)
Which three tags does Google Analytics require for accurate campaign tracking? a. Medium, Source, and Content b. Medium, Source, and Campaign c. Campaign, Content, and Term d. Source, Content, and Term
Answers (1)
Bengal Co. provides the following sales forecast for the next three months: July August September Sales units 5,000 5,700 5,560 The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales.
Answers (1)
A firm has determined, from past experience, that the learning curve for a new electronic component has a log-linear form with a slope coefficient of - 0.10.
Answers (1)
New Questions in Business
In which year were tobacco commercials banned from network television in the united states?
No Answers
Maggie's manager notices that she exhibits an external locus of control when she speaks about her work. Her manager should Group of answer choices a. direct Maggie toward a job with more autonomy. b.
Answers (1)
Consider this argument: "The kidnappers have taken eight people hostage and are holding them at a farmhouse just outside town. If the SWAT team assaults the farmhouse, the hostages could be killed.
Answers (1)
Rent seeking is an attempt to A. use the government for individual benefit at the expense of others. Regulatory capture is an example of this, where a regulatory agency makes decisions benefiting the firm being regulated. B.
Answers (1)
An Insurance company is a business in which it pays to the company if there is a loss, damage, treatments or injury for the payment of premium amount. It calculates the risks that has occurred and pays to compensate the premium amount.
Answers (1)
Home » Business » The preemptive right is important to shareholders because it a. allows managers to buy additional shares below the current market price. b. is included in every corporate charter. c.
Sign Up Forgot Password?