If you own 500 shares (2% of a corporation's stock) and the corporation issues 15,000 new shares, how many of the new shares can you purchase under preemptive right?

Question

Quizplus · Accepted Answer

Preemptive right allows existing shareholders to purchase new shares before they are offered to the general public. The number of shares a shareholder can purchase is proportional to their current ownership percentage. As the shareholder owns 2% of the corporation's stock, they can purchase 2% of the 15,000 new shares, which is 300 shares. Therefore, the correct answer is B.

If You Own 500 Shares (2% of a Corporation's Stock)