The Right for Existing Owners to Maintain Their Ownership Share

question 54

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)a stock option
• B)a stock warrant
• C)preemptive rights
• D)participating stock

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Definitions:

Price-taker Industry

Industries where firms have no control over the market price and must accept the prevailing prices as given.

Short-run Market Supply

The total quantity of goods or services that producers are willing and able to sell at a given price in the market over a short period.

MC Curves

A graphical representation of how the marginal cost of producing one additional unit of a good varies with the quantity produced.

Increasing Cost Industry

An industry where production costs increase as output expands, typically due to factors like resource depletion or increased expenses for inputs.