1. Rights and privileges of ordinary shareholders As companies grow they require investments to fund new projects and ventures. The company can raise funds through internal sources (for example, past profits) or external funding by issuing ordinary shares or debt securities. These debt securities offer investors a certain return along with the repayment of the principal amount. If the company issues ordinary shares, it distribute cash to its investors. Larry Nelson holds 1,000 ordinary shares of General Electric (GE). As a shareholder, he has the right to be involved in the election of its directors, who are responsible for managing the company and achieving the company's objectives. True or False: Larry can invest in another company that is selling class A shares to the public, and class B shares will be retained by company insiders. This will help the founders maintain control in the company. False True Larry also holds 2,000 ordinary shares in a company that only has 20,000 shares outstanding. The company's shares currently are valued at $48.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $38.40 per share. Larry worries about the value of his investment Larry's current investment in the company is additional purchase, Larry's investment will be worth If the company issues new shares and Larry makes no