Maggie Owns 10% or 50,000 Common Shares of a Small

question 210

Multiple Choice

Maggie owns 10% or 50,000 common shares of a small biotech company. Although she has enjoyed a lot of control, Maggie realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Unless she and others exercise preemptive rights,

• A) the company will surely begin to pay dividends.
• B) the new issue will dilute her ownership.
• C) the new issue will decrease the market price of the stock.
• D) The new issue will be traded on the secondary market.

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Definitions:

Accidents

Unforeseen incidents that happen unexpectedly and cause injury or damage without deliberate intent.

Excessive Guilt

A state of feeling remorseful or responsible for a perceived wrong more intensely or for a longer duration than is warranted.

Grieving Process

The emotional and psychological experience of coping with loss, typically involving stages such as denial, anger, bargaining, depression, and acceptance.

Memorial

A structure, event, or work created to honor and remember a person or significant event.