Preemptive Rights Allow Common Stockholders to Maintain Their Proportionate Ownership

question 45

True/False

Preemptive rights allow common stockholders to maintain their proportionate ownership in the corporation when new issues are made.

---

Definitions:

Dividend Payout Ratio

The percentage of net income that a company pays out to its shareholders as dividends, indicating how much money a company returns to shareholders versus retaining.

Price-Earnings Ratio

A measure of a company's current share price relative to its per-share earnings.

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's net income that is paid out to its shareholders as dividends.

Year 2

A term that refers to the second year in a specific period, often used in planning, reporting, or comparison contexts.