NOPREM Inc. is a firm whose shareholders don't possess the preemptive right. The firm currently has 1,000 shares of stock outstanding, the price is $100 per share. The firm plans to issue an additional 1,000 shares at $90.00 per share. Since the shares will be offered to the public at large, what is the amount per share that old shareholders will lose if they are excluded from purchasing new shares? a. $90.00 b. $5.00 c. $10.00 d. $0 e. $2.50
NOPREM Inc. is a firm whose shareholders don't possess the preemptive right. The firm currently has 1,000 shares of stock outstanding, the price is $100 per share. The firm plans to issue an additional 1,000 shares at $90.00 per share. Since the shares will be offered to the public at large, what is the amount per share that old shareholders will lose if they are excluded from purchasing new shares?
a. $90.00
b. $5.00
c. $10.00
d. $0
e. $2.50
A shareholder, also known as a stockholder, is an individual, corporation, or institution who owns at least one share of a company's equity, also known as stock. Shareholders benefit from the company's success because they essentially own it. These advantages manifest themselves as higher stock valuations or financial profits distributed as dividends. In many cases, majority shareholders are company founders, and in older companies, majority shareholders are commonly descendants of company founders.
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