The Right of Current Stockholders to Purchase Additional Shares in Order

question 7

Multiple Choice

The right of current stockholders to purchase additional shares in order to maintain the same percentage ownership of new shares is called

• A) Liquidation
• B) The voting rights privilege
• C) Preemptive right
• D) The cumulative preference

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Definitions:

Terms

Conditions and stipulations specified in an agreement or contract that outline the obligations, rights, and duties of the parties involved.

Offer

A proposal by one party to another regarding a potential contract, indicating a willingness to enter into an agreement under specified terms.

Mailbox Rule

A legal principle that considers a contract offer as accepted once the acceptance has been placed in the mailbox for return, even if it has not yet been received by the offeror.

Acceptance

In contract law, refers to the expression by the offeree to agree to the terms of an offer, resulting in a binding contract.