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 companys objectives.

True or False: Larry will receive dividends together with preferred stockholders.

True

False

Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The companys stock currently is valued at $45.00 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 $36.00 per share. Larry worries about the value of his investment.

Larrys current investment in the company is .

If the company issues new shares and Larry makes no additional purchase, Larrys investment will be worth .

This scenario is an example of . Larry could be protected if the firms corporate charter includes a provision.

If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become .