A Preemptive Right Is a Preference Over Other Shareholders to Cast

question 5

True/False

A preemptive right is a preference over other shareholders to cast the determining vote on fundamental changes affecting the corporation.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially considered as affecting liquidity.

Shareholder Wealth

The total value of shares held by investors in a company, often used as a measure of company’s financial health and management performance.

Cost of Capital

The cost of capital represents the minimum return a company needs to achieve to justify the risk of the investment, encompassing the cost of debt and equity.

Mutually Exclusive

Events or choices that cannot occur or be chosen at the same time.