Conversion Rights

question 21

Multiple Choice

Conversion rights

• A)specify the order in which classes of stockholders are paid upon dissolution.
• B)are designed to prevent dilution of a shareholder's ownership in the company.
• C)allow investors to convert to a different class.
• D)establish whether shareholders are entitled to dividends.

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Definitions:

Shareholders

Individuals or institutions that own one or more shares of stock in a public or private corporation, giving them partial ownership of the company.

Budget Deficit

The financial situation where a government's expenditures exceed its revenues in a given fiscal period, leading to borrowing or debt accumulation.

Nominal GDP

The production of goods and services valued at current prices.

Sustainable

The quality of not being harmful to the environment or depleting natural resources, thereby supporting long-term ecological balance.