A Preemptive Right Is a Provision in the Corporate Charter

question 18

True/False

A preemptive right is a provision in the corporate charter or by laws that gives common stockholders the right to purchase on a pro rata basis new issues of common stock.

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Definitions:

Elastic

Describes a situation in which the supply or demand for a good or service is highly responsive to changes in price.

Long Run

A period in economic analysis where all factors of production and costs are variable, allowing for full adjustment to changes in the market or economy.

Short Run

A period in economic theory during which at least one factor of production is fixed, limiting the capacity to adjust to changes in market demand.

Elastic

Describes a situation where the quantity demanded or supplied of a good is sensitive to changes in price.