Podcast
Questions and Answers
What term describes the right of common shareholders to have the first opportunity to buy additional shares issued by the corporation?
What term describes the right of common shareholders to have the first opportunity to buy additional shares issued by the corporation?
- Preemptive right (correct)
- Financial leverage
- Right to call
- Voting right
Which of the following rights is specifically aimed at providing protection for common shareholders' stakes?
Which of the following rights is specifically aimed at providing protection for common shareholders' stakes?
- Voting right
- Proxy
- Financial leverage
- Preemptive right (correct)
If a corporation issues new common shares, which right allows existing shareholders to purchase these shares first?
If a corporation issues new common shares, which right allows existing shareholders to purchase these shares first?
- Financial leverage
- Right to call
- Proxy
- Preemptive right (correct)
Which of the following does not pertain to protecting shareholder interests in common stock?
Which of the following does not pertain to protecting shareholder interests in common stock?
In the context of common shares, what is a right that allows shareholders to approve or disapprove management proposals?
In the context of common shares, what is a right that allows shareholders to approve or disapprove management proposals?
Flashcards
Preemptive Right
Preemptive Right
The right of existing shareholders to buy new shares before they are offered to the public.
Shareholders
Shareholders
Owners of a corporation's stock.
Common Stock
Common Stock
A type of stock that provides ownership in a company.
Protect their proportionate interest
Protect their proportionate interest
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New shares
New shares
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Study Notes
Common Shareholder Rights
- Common shareholders have the right to protect their proportional interest in a corporation
- This right allows them to buy additional shares before they are offered to the public
- This right is called the preemptive right
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Description
Test your knowledge on the rights of common shareholders in a corporation. This quiz covers crucial concepts such as the preemptive right and proportional interest. Understand how these rights protect shareholder interests in corporate settings.
