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A. Santos owns 8,000 shares out of the 20,000 outstanding shares of capital stock of XYZ Corp. which has 50,000 shares of authorized capital stock.

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A. Santos owns 8,000 shares out of the 20,000 outstanding shares of capital stock of XYZ Corp. which has 50,000 shares of authorized capital stock. The latter issues 10,000 additional shares of capital stock giving all its present stockholders the right to subscribe thereto at the rate of one-for-two. 3. The proportionate interest of A. Santos in XYZ Corp. at present is (a). 16% (b). 40% (c). 11.4% (d). Answer not given 4. If A. Santos exercises his rights, his proportionate interest will (a). increase (b). decrease (c). remain the same (d). Answer not given 5. If A. Santos partially exercises his rights by subscribing to 3,000 shares only, his proportionate interest would be (a). 40% (b) 37% (c) 22% (d) Answer not given 6. If A. Santos fails to exercise his rights, his proportionate interest would become (a). 40% (b). 27% (c). 16% (d). Answer not given

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