g value co (value) has 15 million shares outstanding, which trade at $20 per share. value is in a liquidity crisis and issues 2 million shares at $12 per share to a group of hedge funds. what is the total loss incurred by pre-existing shareholders as a result of this share issue?

Respuesta :

All of a company's common shareholders may receive preemptive rights from a U.S. company. but federal law does not require this. The company charter will specify whether such rights are recognized.

A subscription warrant that entitles the shareholder to purchase a certain number of shares in a new issue, typically in proportion to their current ownership percentage, may also be issued to the shareholder.

Which Rights Are Preemptive?

Shareholders with preemptive rights can acquire additional shares of a company's common stock before they are made available to the general public in any subsequent issue. This right is a clause in a contract that is usually only available in the United States to early investors in a company that just went public or to majority owners who want to keep their stake in the company when and if more shares are issued.

Learn more about preemptive rights here:

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