Scubapro Corporation currently has 500,000 shares of common stock outstanding and plans to issue 200,000 more shares in a seasoned equity offering. The current shareholders have preemptive rights on any new issues of common stock by Scubapro Corporation. How many shares would an investor who currently has 20,000 shares, have the right to buy if she exercises her preemptive right?
A. 200,000 shares
B. 120,000 shares
C. 20,000 shares
D. 12,000 shares
E. 8,000 shares
Answer: E
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