Maureen Owns 20% of the Common Stock of the Queen

question 73

Multiple Choice

Maureen owns 20% of the common stock of the Queen Bean Corporation. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Maureen exercises her preemptive rights, Queen Bean must offer her the opportunity to purchase:

• A) 8,000 shares.
• B) 2,000 shares.
• C) as many of the new shares as the investor is willing and able to buy.
• D) 20% of the outstanding preferred stock.

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Definitions:

Principal

The original amount of money on which interest is calculated.

Composition

The act of combining two functions by applying one function to the result of another.

Function

A mathematical relation in which each element of a set of inputs is associated with exactly one element of a set of outputs.

Inverse Function

A function that reverses the operation of a given function, so that if the original function applied to an input gives a certain output, the inverse function applied to that output returns the original input.