The Right of Common Shareholders to Protect Their Proportionate Interest

question 34

Multiple Choice

The right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional proportionate shares of common stock issued by the corporation is called a:

• A)Preemptive right.
• B)Proxy right.
• C)Right to call.
• D)Financial leverage.
• E)Voting right.

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Definitions:

Tax Rate

The tax imposition rate on the financial gains of individuals and corporations.

Machinery

Tools, equipment, and devices that perform various tasks in the production process, often indicating the fixed assets used in manufacturing or production.

Equipment

Tangible items purchased for use in the production or supply of goods and services, not intended for sale as part of regular operations.

Depreciated

The reduction in the value of an asset over time, often due to wear and tear or obsolescence.