Asked by Erinn Whitlock on Apr 24, 2024

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Rights that allow stockholders to maintain their proportionate ownership of a corporation are called:

A) proportionate rights.
B) cumulative rights.
C) preemptive rights.
D) Both a and b above
E) All of the above

Preemptive Rights

A stockholder’s right to maintain her proportionate ownership in a corporation. The stockholder has the right to buy a share of any newly issued stock that is proportionate to her fractional ownership of the company before the new issue. The right is not a matter of law but must be written into the corporation’s bylaws.

Proportionate Ownership

Ownership shares in a company or asset divided among investors in proportion to their investment.

  • Pinpoint the determinants impacting the intrinsic value of a stock and the significance of fundamental analysis.
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SS
Shavez Siddiqui7 days ago
Final Answer :
C
Explanation :
The rights that allow stockholders to maintain their proportionate ownership of a corporation are called preemptive rights. Proportionate rights refer to the rights to maintain a proportionate share in any profits or assets that a company generates. Cumulative rights refer to the rights of stockholders to accumulate their voting power in order to elect a preferred candidate to the board of directors. However, neither proportionate nor cumulative rights specifically address the issue of maintaining proportionate ownership.