The Right for Existing Owners to Maintain Their Ownership Share

question 25

Multiple Choice

The right for existing owners to maintain their ownership share by purchasing sufficient shares to keep their percentage share of the firm is called:

• A) stock option
• B) stock warrant
• C) preemptive right
• D) participating stock
• E) paid-in-kind preferred stock

---

Definitions:

Installment Payments

Payments made regularly over time to settle a debt or purchase, dividing the total cost into smaller amounts.

Principal Balance

The outstanding amount of a loan or mortgage that remains to be paid, excluding interest.

Mortgage Note Payable

A liability in the form of a written promise to repay a specified amount of money, along with interest, secured by a mortgage on property.

Loan Principal

The original sum of money borrowed in a loan agreement, excluding interest, that must be repaid or serviced.