Concerning the Preemptive Right of a Stockholder, Which of the Following

question 10

Multiple Choice

Concerning the preemptive right of a stockholder, which of the following does NOT apply:

• A) the stockholder can exercise the right by purchasing the allotted amount of new shares thereby maintaining proportional ownership
• B) the stockholder can sell the right to purchase to someone else
• C) the current stockholders must be given the right of first refusal
• D) the new shares must be priced at the price the stockholder originally paid for his or her stock

---

Definitions:

Internal Control

A process designed to ensure reliability in financial reporting, effectiveness and efficiency of operations, and compliance with laws and regulations.

Fraud

Deceptive practice intended to result in financial or personal gain, often involving the deliberate misrepresentation or omission of critical information.

Reliability

The consistency and dependability of data or an instrument, often measured over time to ensure stability and accuracy in results.

Accounting Records

Accounting Records are documentation and books that comprise all the financial statements, ledgers, and other pertinent financial information about a business.