A Preemptive Right Is

question 56

Multiple Choice

A preemptive right is

• A)the right to vote in the election of directors and to establish corporate policies
• B)the right to share in the profits when a dividend is declared
• C)the right to maintain a proportionate interest in the ownership of the corporation by purchasing a proportionate share of additional capital stock should such stock be issued
• D)the right to share in the distribution of the assets of the corporation should it be liquidated

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Definitions:

Capital Expenditures

Money invested by an enterprise to procure, upgrade, and preserve solid assets, such as premises, industrial structures, or equipment.

Fixed Asset Turnover Ratio

A financial metric that measures a company's ability to generate net sales from fixed assets like property, plant, and equipment.

Cost Basis

The original value of an asset for tax purposes, usually the purchase price, adjusted for stock splits, dividends, and return of capital distributions.

Appraisal Value

An estimation of a property's market value based on an appraiser’s knowledge, experience, and analysis of the property.