Which of the following statements is CORRECT?
A. If a company has two classes of common stock, Class A and Class B, then the stocks may pay different dividends, but under all state charters the two classes must have the same voting rights.
B. The preemptive right gives stockholders the right to approve or disapprove of a merger between their company and some other company.
C. The preemptive right is a provision in the corporate charter that gives common stockholders the right to purchase (on a pro rata basis) new issues of the firm's common stock.
D. The stock valuation model, P0 = D1/(rs - g), cannot be used for firms that have negative growth rates.
E. The stock valuation model, P0 = D1/(rs - g), can be used only for firms whose growth rates exceed their required returns.
Answer: C
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The column totals of the combination journal for Davis Manufacturing are: Cash Debit, $1,500; Cash Credit, $1,328.50; General Debit, $868.20; General Credit, $1,300 . If the totals are correct, and the Wages Expense is the only other column, what must be the total of the Wages Expense Debit column?
a. $171.50 b. $260.30 c. $431.80 d. $1,039.70
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Indicate whether the statement is true or false