The Preemptive Right Is Important to Shareholders Because It

question 39

Multiple Choice

The preemptive right is important to shareholders because it

• A) will result in higher dividends per share.
• B) is included in every corporate charter.
• C) protects the current shareholders against a dilution of their ownership interests.
• D) protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate.
• E) allows managers to buy additional shares below the current market price.

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