Larry Nelson holds 1,000 shares of General Electric (GE) common stock. As a stockholder, 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: The preemptive right allows Larry to purchase any additional shares sold by the company. This right will protect Larry from dilution in the value of the stocks he holds. True False Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company's stock currently is valued at $43.00 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 $34.40 per share. Larry worries about the value of his investment. Larry's current investment in the company is $86,000. If the company issues new shares and Larry makes no additional purchase, Larry's investment will be worth less. This scenario is an example of a proxy. If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become $154, 800. (Assume that the market price of existing shares does not change when the new shares are issued.) This company, which has 20,000 shares outstanding, elects its board members annually. Even year only 85% of shareholders cast votes for the election of directors. The company has five board members on its board of directors. If the company uses a majority rule voting procedure, how many shares are necessary to elect each director? 7, 011 8, 510 6, 810 If the company uses a cumulative voting procedure, how many shares are necessary to elect one director? 2, 933 2, 834 17,001 3, 401