The Pre-Emptive Right Enables a Shareholder to

question 17

Multiple Choice

The pre-emptive right enables a shareholder to

• A)share proportionately in any new issues of shares of the same class.
• B)receive cash dividends before other classes of stock without the pre-emptive right.
• C)sell ordinary shares back to the corporation at the option of the shareholder.
• D)receive the same amount of dividends on a percentage basis as the preference shareholders.

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Definitions:

Recorded

The process of documenting financial transactions in the accounting records of an organization.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various other financial services, such as currency exchange and wealth management.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those shown on a bank statement to ensure they are in agreement and accurate.

Return of Customer's Check

Typically involves a financial transaction in which a previously issued check is returned to the issuer, often due to insufficient funds in the customer's account.