NOPREM Inc

question 16

Multiple Choice

NOPREM Inc. is a firm whose shareholders don't possess the preemptive right. The firm currently has 1,000 shares of stock outstanding; the price is $100 per share. The firm plans to issue an additional 1,000 shares at $90.00 per share. Since the shares will be offered to the public at large, what is the amount per share that old shareholders will lose if they are excluded from purchasing new shares?

• A) $90.00
• B) $ 5.00
• C) $10.00
• D) $ 0
• E) $ 2.50

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