--%>

Preemptive right protect interests of existing stockholders

Explain: a pre-emptive right protect the interests of existing stockholders.

E

Expert

Verified

Pre-emptive right protects the existing stockholders interests by providing them the opportunity to pre-empt other investors while buying of new shares. If pre-emptive rights are exercised then the existing shareholders will maintain the similar percentage of ownership even after the new stock is issued as before.

   Related Questions in Financial Management

  • Q : Bid-ask quotes in forward points Normal

    Normal 0 false false

  • Q : Illustrates that how is all money far

    Should you place all your money in a stock which has low risk but also low expected return, or one along with high expected return but that is far riskier or maybe divide your money among the two?

  • Q : What is a Jump-Diffusion Model in

    What is a Jump-Diffusion Model in Poisson Process?

  • Q : Describe criteria for a good

    Describe criteria for a ‘good' international monetary system.A good international monetary system have to provide (I) adequate liquidity to the world economy, (ii) s

  • Q : European term bid-ask How you got to

    How you got to this result? One-Month 01-06 Three-Month 17-27 Six-Month 57-72

  • Q : Explain procedure of bringing new

    Explain the procedure of bringing a new international bond issue to market.A borrower desiring to increase funds through issuing Eurobonds to the investing public will contact an investment banker and ask it to serve as lead manager of an underw

  • Q : Describe the long position in an

    Describe the long position in an options contract?An option is a contract giving the long the right to buy or sell a given quantity of an asset at a particular price at some time in the future, however not enforcing any obligation on him if the

  • Q : What is GATT and what is its goal? What

    What is GATT and what is its goal?

  • Q : Advantages and the risks of being a MNC

    What are some of the primary advantages and the risks when a corporation has operations in countries other than its home country?

  • Q : Kareem construction Show how Kareem's

    Show how Kareem's WACC would change if the tax rate dropped to 25 percent and the estimated cost of equity capital were based on a risk-free rate of 7 percent, a market risk premium of 8 percent, and a systematic risk measure or beta of 2.0.