If a Corporate Charter Includes a Provision for Preemptive Rights

question 64

Multiple Choice

If a corporate charter includes a provision for preemptive rights, the original stockholders

• A) must sell their stock to the company.
• B) get first option to buy additional issues of common stock.
• C) may purchase existing treasury stock.
• D) cannot utilize cumulative voting procedures.

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Definitions:

Reinforcement

A process in speciation where natural selection increases the divergence between two populations of species, leading to the development of reproductive barriers.

Universalism Versus Particularism

A cultural dimension that describes the extent to which a society prefers clear rules and standards (universalism) over the flexibility to adapt norms and rules to special circumstances (particularism).

Flexibility

The ability of an organization or individual to adapt to changes, challenges, or uncertainties quickly and efficiently.

Rules

Are established guidelines or principles governing behavior or operations, designed to control or govern conduct within various environments.