--%>

How does preemptive right secure interests of stockholders

How does a preemptive right secure the interests of present stockholders?
A preemptive right secure the interests of existing stockholders through giving them the chance to preempt other investors into the purchase of new shares. If these rights are exercised, existing shareholders would maintain their similar percentage of ownership after the new stock issue as before.

   Related Questions in Finance Basics

  • Q : Cause-and-effect chain Normal 0 false

    Normal 0 false false

  • Q : Role of depreciation in estimating

    What kind of role does depreciation play in estimating incremental cash flows? Depreciation expense is a tax deductible expense and therefore affects cash flow through its effect on taxes. Depreciation expense which is incremental to a proposed

  • Q : Define the term floor Floor: The

    Floor: The Assembly or Senate chambers or the word employed to explain the location of a bill or the kind of session. Matters might be termed to as “on the floor”.

  • Q : What is Fiscal Year Fiscal Year (FY):

    Fiscal Year (FY): Twelve-month periods throughout which income is earned and received, compulsions are incurred, encumbrances are prepared, appropriations are expended, and for which the other fiscal transactions are recorded. In Cali

  • Q : Making capital structure decisions In a

    In a perfect capital market, what advice would you give a corporate financial manager on making capital structure decisions? Justify your advice. How and why would your advice change as real world capital market imperfections are introduced?

    Q : Describe benefits of the JIT inventory

    Describe the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lowers inventory carrying costs & tends to raise quality.  

  • Q : Illustrates new balance sheet Normal 0

    Normal 0 false false

  • Q : Explain Budget Cycle Budget Cycle : The

    Budget Cycle: The time period needed to made a state financial plan and enacts that part of it applying to the budget year. The Significant events in the cycle comprise: • The preparation of G

  • Q : What is Pooled Money Investment Account

    Pooled Money Investment Account (PMIA) It is a State Treasurer's Office accountability account maintains by State Controller's Office to account for short-term investments procured by the State Treasurer's Office as designated by the Pooled Money Inve

  • Q : Explain State-Mandated Local Program

    State-Mandated Local Program: The state compensations to local governments for the cost of activities needed by legislative and executive acts. This reimbursement necessity was established, Statutes of 1972 (SB 90) and further approved by the adoption