--%>

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 : Explain Continuously Vacant Positions

    Continuously Vacant Positions: On July 1, the positions which were continuously vacant for six successive monthly pay periods throughout the prior fiscal year are abolished by the State Controller's Office. The six successive monthly

  • Q : Describe financial ratio Describe

    Describe financial ratio? This is a number which expresses the value of one financial variable relative to another. Put more cleanly, a financial ratio is the result you obtain when you divide one financial number by another.  Computing an

  • Q : How are financial trades made in an

    How are financial trades made in an over the counter market?On the contrary to the organized exchanges that have physical locations, the over the counter market contain no fixed location, or more accurately, it is everywhere. The over the counte

  • Q : Exdplain how does continuous

    Normal 0 false false

  • Q : Define Spot Bill Spot Bill : It is an

    Spot Bill: It is an introduced bill which makes non-substantive modifications in a law, generally with the intent to amend the bill at a later date to comprise substantive law modifications. This procedure gives a means for circumventing the deadline

  • Q : Problem of time lags in enacting and

    Normal 0 false false

  • Q : How cash and capital budget relate to

    Describe how the cash budget and the capital budget associate to proforma financial statements.The cash budget illustrates the projected flow of cash in and out of the firm for particular time periods. The capital budget illustrates planned expe

  • Q : In which ratios long-term bond investor

    Which ratios would a potential long-term bond investor is most interested in? Describe. Current & potential lenders of long-term funds, such like banks & bondholders, are interested in debt ratios.  While a business's debt ratios ri

  • Q : What is Special Fund for Economic

    Special Fund for Economic Uncertainties: It is a fund in the General Fund (that is, a similar reserve is involved in each special fund) authorized by the statute and Budget Act Control Section 12.30 to offer for emergency situations.

  • Q : Describe free cash flows Describe "free

    Describe "free cash flows?" It represents the total cash flows from business operations which are obtainable to be distributed to the suppliers of a firm's capital each year either within the form of interest to the debt holders, or dividends to