You own 10 percent of the shares of common stock currently held in Zeerocks Corporation.At the most recent meeting,the board of directors authorized 100 000 new shares of stock to be sold to raise funds.As an existing shareholder,you may have a pre-emptive right to buy up to how many shares of the new stock before it is offered to the public?

Question

You own 10 percent of the shares of common stock currently held in Zeerocks Corporation.At the most recent meeting,the board of directors authorized 100 000 new shares of stock to be sold to raise funds.As an existing shareholder,you may have a pre-emptive right to buy up to how many shares of the new stock before it is offered to the public?

Quizplus · Accepted Answer

As a 10% shareholder, you have the pre-emptive right to purchase 10% of the new shares, which is 10,000 shares (10% of 100,000).

You Own 10 Percent of the Shares of Common Stock