If Shareholders Are Granted a Preemptive Right They Will

question 48

Multiple Choice

If shareholders are granted a preemptive right they will:

• A)be given the choice of receiving dividends either in cash or in additional shares of stock.
• B)be paid dividends prior to the preferred shareholders during the preemptive period.
• C)be entitled to two votes per share of stock.
• D)be able to choose the timing and amount of any future dividends.
• E)have priority in the purchase of any newly issued shares.

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Definitions:

Cost Center

A division or department within a business to which costs can be allocated for accounting and budgeting purposes.

Indirect Expense

Costs not directly traceable to a specific cost object, such as overhead or administrative expenses, which support the operation of the business as a whole.

Profit Center

A branch or division of a company that is directly responsible for generating its portion of the organization's overall profit.

Generates Revenue

The process or activities that result in income being brought into a company, such as sales of goods or provision of services.