Which of the Following Explains the Preemptive Right of Common

question 133

Multiple Choice

Which of the following explains the preemptive right of common stockholders?

• A) A corporation cannot pay any dividend to its preferred stockholders unless it pays the full stated dividend on its common stock.
• B) When a company goes bankrupt, its stockholders can recover some (but not all) of what they are owed.
• C) If a corporation issues new stock, existing stockholders can purchase new shares in proportion to their existing holdings before the stock is offered to the other investors.
• D) If a firm skips a stockholder's dividend in one period, the amount it must pay the next period is equal to the dividend for that period plus the amount of the dividend it skipped in the previous period.

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Definitions:

Cross-sectional

An observational study type that examines data collected from a population or a representative sample at one particular point in time.

Cross-sectional

A research design that analyzes data from a population, or a representative subset, at one specific point in time.

Longitudinal

A study setup where the same factors are observed multiple times over periods that can be either brief or extended.

Prospective Cohort

A study that follows a group of similar individuals over time to determine how their exposures affect their outcomes.