Rights and privileges of common stockholders Larry Nelson holds 1,000 shares of General Electric’s (GE) common stock. The annual stockholder meeting is being held soon, but as a minor shareholder, Larry doesn’t plan to attend. Larry did not sell his shares but gave his voting rights to the management group running General Electric (GE). Larry must have signed a Q1 _that gives the management group control over his shares. Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $48.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $38.40 per share. Larry worries about the value of his investment. Larry’s current investment in the company is Q2. If the company issues new shares and Larry makes no additional purchase, Larry’s investment will be worth Q3 . This scenario is an example of Q4. Larry could be protected if the firm’s corporate charter includes a Q5_ provision. If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become Q6____. Q1. Option 1 Poison pill or Option 2 Proxy or Option 3 Preemptive right Q2. Option 1 $96,000 or Option 2 $38,400 or Option 3 $57,600 or Option 4 $105,600 Q3. Option 1 $92,160 or Option 2 $96,000 or $230,400 or $115,200 Q4. Option 1 Poison pill or Option 2 Dilution or Option 3 A takeover or Option 4 A proxy Q5. Option 1 Preemptive right or Option 2 Proxy Q6. Option 1 $116,200 or Option 2 $172,800 or Option 3 $86,400 or Option 4 $115,200. Thank you for answering. Please check the options below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rights and privileges of common stockholders

Larry Nelson holds 1,000 shares of General Electric’s (GE) common stock. The annual stockholder meeting is being held soon, but as a minor shareholder, Larry doesn’t plan to attend. Larry did not sell his shares but gave his voting rights to the management group running General Electric (GE). Larry must have signed a Q1 _______that gives the management group control over his shares.

Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company’s stock currently is valued at $48.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $38.40 per share. Larry worries about the value of his investment.

Larry’s current investment in the company is Q2______. If the company issues new shares and Larry makes no additional purchase, Larry’s investment will be worth Q3 ________.

This scenario is an example of Q4______. Larry could be protected if the firm’s corporate charter includes a Q5_______ provision.

If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become Q6________.

Q1. Option 1 Poison pill or Option 2 Proxy or Option 3 Preemptive right

Q2. Option 1 $96,000 or Option 2 $38,400 or Option 3 $57,600 or Option 4 $105,600

Q3. Option 1 $92,160 or Option 2 $96,000 or $230,400 or $115,200

Q4. Option 1 Poison pill or Option 2 Dilution or Option 3 A takeover or Option 4 A proxy

Q5. Option 1 Preemptive right or Option 2 Proxy

Q6. Option 1 $116,200 or Option 2 $172,800 or Option 3 $86,400 or Option 4 $115,200.

Thank you for answering. Please check the options below.

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