The preemptive right gives current stockholders the right to purchase, on a pro rata basis, any new shares issued by the firm. This right helps protect current stockholders against both dilution of control and dilution of value
a. True
b. FalseIndicate whether the statement is true or false
True
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Which of the following statements is CORRECT?
A. Other things held constant, a callable bond should have a lower yield to maturity than a noncallable bond. B. Once a firm declares bankruptcy, it must then be liquidated by the trustee, who uses the proceeds to pay bondholders, unpaid wages, taxes, and lawyer fees. C. Income bonds must pay interest only if the company earns the interest. Thus, these securities cannot bankrupt a company prior to their maturity, and this makes them safer to the issuing corporation than "regular" bonds. D. A firm with a sinking fund that gave it the choice of calling the required bonds at par or buying the bonds in the open market would generally choose the open market purchase if the coupon rate exceeded the going interest rate. E. One disadvantage of zero coupon bonds is that the issuing firm cannot realize any tax savings from the debt until the bonds mature.
What are derivative instruments and how are they used?
Journalizing is the process of entering amounts in the ledger
Indicate whether the statement is true or false
The institution with the greatest assortment of any general merchandise retailer is the _____
a. department store b. supermarket c. full-line discount store d. superstore