The Kinderfelt Corporation has 15, 000 outstanding shares, out of which, Gordon owns 3, 000.Kinderfelt Corporation plans to raise more capital by issuing another 10, 000 shares of stock.With preemptive rights, how many of the new shares would Gordon have the right to buy before they are sold to the public?

Question

Quizplus · Accepted Answer

Preemptive rights allow Gordon to maintain his ownership percentage. He owns 20% (3,000 out of 15,000) of the current shares, so he has the right to buy 20% of the new 10,000 shares, which is 2,000 shares.

The Kinderfelt Corporation Has 15, 000 Outstanding Shares, Out of Which