As a Common Shareholder in a fiRm, Which of the Following

question 137

Multiple Choice

As a common shareholder in a firm, which of the following allows you to share proportionately in any new stock sold?

• A) Proxy voting.
• B) Preemptive right.
• C) Cumulative voting.
• D) Straight voting.
• E) Dual class stock.

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Definitions:

Dilution

A reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

Business Combination

A transaction or event in which an acquirer gains control over one or more businesses, typically involving mergers, acquisitions, or consolidations.

Parent-subsidiary

The relationship between two corporations in which one corporation, the parent, owns sufficient voting stock in another corporation, the subsidiary, to control its board of directors.

Economic Entity

A unit in the economy that is capable of control over resources, incurring liabilities, and engaging in business activities.