Maggie owns 10% or 50,000 common shares of a small biotech company. Although she has enjoyed a lot of control, Maggie realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Unless she and others exercise preemptive rights,

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Business

Scarlett Flores

17 September, 02:38

Maggie owns 10% or 50,000 common shares of a small biotech company. Although she has enjoyed a lot of control, Maggie realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Unless she and others exercise preemptive rights,

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Answers (2)

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Isiah · Answer 1

Answer: Maggie 's control that is 10%over the small biotech company will be reduced

Explanation:

Maggie owns 10% or 50,000 common shares of a small biotech company. Although she has enjoyed a lot of control, Maggie realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Unless she and others exercise preemptive rights

In doing so to acquire more funds, Maggie's share of about 10% or 50000 common shares of a small biotech company will now be reduced as more investors come in to biotech company avoid recession

Brennan Pruitt · Answer 2

Answer:the new issue will dilute her ownership.

Explanation:Dilution of ownership occurs when a company sells it's shares to more people therby making the value of existing shareholders shares smaller or their

Ownership percentage of that company

So unless they take the first option to acquire certain new property or assets coming into existence before it can be offered to any other person or entity the new issue will dilute her ownership