Cox Corporation has issued 1,000 shares of stock.Janis owns 200 shares.If the corporation issues an additional 500 shares,how many shares does Janis have the preemptive right to purchase?

Question

Quizplus · Accepted Answer

Preemptive right allows existing shareholders to purchase additional shares in proportion to their current ownership before they are offered to the public. In this scenario, there are a total of 1,000 shares of stock, and Janis owns 200 shares, which is 20% of the total shares. If the corporation issues an additional 500 shares, Janis will have the preemptive right to purchase 20% of those shares, which is 100 shares. Therefore, the correct answer is A) 100 shares.

Cox Corporation Has Issued 1,000 Shares of Stock