Question
Rush Consulting, Inc. (Rush) is a New York corporation that was formed in January 2015. The Rush certificate of incorporation authorizes the issuance of 10,000,000
Rush Consulting, Inc. (Rush) is a New York corporation that was formed in January 2015. The Rush certificate of incorporation authorizes the issuance of 10,000,000 shares of $.01 par value common stock, 1,000,000 shares of cumulative $5 nopar preferred stock, and 2,000,000 shares of $100 par value 10% noncumulative preferred stock. The Rush certificate of incorporation provides for preemptive rights for common stockholders. It is now June 2019, and Rush has the following shareholders: Geddy owns 3 million shares, Alex owns 2 million shares and Neil owns 1 million shares. There are no other shareholders. Rush also has 500,000 shares of treasury stock.
Assume that there is no treasury stock. Rush offers 1 million shares of the unissued common stock to Tull for $70 per share. How many of these 1 million shares is Geddy entitled to purchase before Tull can make the purchase?
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