Larry Nelson holds 1,000 shares of General Electric common stock. As a shareholder, he has the right to be involved in the election of its directors. These directors are responsible for managing the company and achieving the companys objectives.

True or False: Larry can vote in person at the companys annual meeting, through the mail, or by transferring the right to vote to another person by means of transfer of ownership of shares.

False

True

Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. Currently, the companys stock is valued at $48.00 per share. The company needs to raise new capital to invest in its future production activities. The company is anticipating issuing 5,000 new shares at a price of $38.40 per share. Larry worries about the value of his investment.

Larrys current investment in the company is worth

. If the company issues its new shares and Larry makes no additional investments in the company, then his 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

.