What Is a Preemptive Right

question 28

Multiple Choice

What is a preemptive right?

• A) It is the right of shareholders to create a trust and elect a commissioner for the trust.
• B) It is the right of shareholders to make an advance voting agreement among them to vote in a specific manner.
• C) It is the right of shareholders to protect dilution of their percentage of share ownership.
• D) It is the right of shareholders to elect a representative, commonly another individual or a written document, through which they can cast their votes at the annual meeting.
• E) It is the right of shareholders to distribute their total votes in any manner they choose-all for one candidate or several shares for different candidates.

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Definitions:

Investing Activities

The acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Non-Current Assets

Assets intended to be held for more than one financial period, such as property, plant, and equipment, intangible assets, or long-term investments.

Financial Structure

Refers to the mix of debt and equity finance used by a company to finance its operations and grow.

Machinery

Equipment or devices designed for a specific purpose, often used in manufacturing or industrial processes.