The Right to Buy New Shares of Stock in Proportion

question 20

Multiple Choice

The right to buy new shares of stock in proportion to stock already owned is called a

• A) stock right.
• B) stock option.
• C) Section 1244 right.
• D) preemptive right.

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Definitions:

Salvage Value

The predicted disposal value of an asset at the conclusion of its usable life.

Net Cash Flows

The amount of cash that is generated or lost over a specific period, considering all cash inflows and outflows from operations, financing, and investing activities.

Year-End

The conclusion of a fiscal year when a company completes its accounting period, often used to finalize financial reports and assess annual performance.