The Pre-Emptive Right of an Ordinary Shareholder Is the Right

question 46

Multiple Choice

The pre-emptive right of an ordinary shareholder is the right to

• A)share proportionately in corporate assets upon liquidation.
• B)share proportionately in any new issues of stock of the same class.
• C)receive cash dividends before they are distributed to preference shareholders.
• D)exclude preference shareholders from voting rights.

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced, indicating the cost per unit of output.

Pure Monopolist

A market structure in which a single seller dominates the entire market, facing no competition.

Profit-Maximizing Output

The level of production at which a company can achieve the highest possible profit, usually determined by marginal cost and marginal revenue analysis.

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product, without price discrimination.