1. Rights and privileges of common stockholders Larry Nelson holds 1,000-shares of General Electric common stock. As a shareholder, he has the right to be involved in the election of its directors. These directors are responsible for managing the company and achieving the company's objectives. True or False: The preemptive right allows Larry to purchase any additional shares sold by the company. This right wilf protect Larry from ditution in the value of the shares he holds. True Folse Larry also hoids 2,000 shares of common stock in a compony that only has 20,000 shares outstanding. Currently, the company's stock is valued at \$42.00 per share. The company needs to raise new capital to invest in its future productoon activities. The company is anticlpating issuing 5,000 new shares at a price of \$33.60 per share. Larry worries about the value of his investment. Larry's current imvestment in the company is worth If the company iswes its new shares and Larry makes no additional investments in the compamy, then his investment will be worth This scenario is an example of Lamy could be pretected if the firm's corporate charter includes a provision: If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm wal become