Which of the Following Is True of the Issuance of Nonvoting

question 61

Multiple Choice

Which of the following is true of the issuance of nonvoting common stock?

• A) It is issued in the event of a hostile takeover to preserve the interests of existing owners.
• B) It helps the corporation to raise capital through the sale of common stock, without giving up its voting control.
• C) It helps the existing stockholders to automatically transfer their voting rights to new stockholders without any legal proceeding.
• D) It tends to result in the dilution of voting rights of current stockholders.

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Definitions:

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholder equity at a specific point in time, providing a snapshot of its financial condition.

Assets Section

Part of a balance sheet that lists and describes an entity's resources or items of value owned.

Merchandising Business

An enterprise that purchases finished goods for resale to generate profit, operating between the producers and end consumers.

Supermarket

A large retail market that sells food and other household goods, typically organized into aisles.