Kate and Kevin are shareholders of Sernett’s, a highly successful chain of stores. Kevin owns 12% of the outstanding shares while Kate owns 14%. Neither wants to lose their ownership proportion when Sernett’s issues new shares. The mechanism to protect their voting strength is
stock certificates.
dividends rights.
preemptive rights.
stock warrants.
Preemptive rights is the answer.
Preemptive rights means that the investor has the right to maintain his ownership percentage of a company by buying a proportionate number of shares of any future issue of the shares.
Stock certificate is not the correct answer it represents ownership of the company.
A stock warrant gives the holder the right to buy shares at a certain price before the expiry date. Wrong answer.
Kate and Kevin are shareholders of Sernett’s, a highly successful chain of stores. Kevin owns 12%...
Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...