Noran Corporation has issued 4,800 shares of stock. Emily owns 490 shares. If the corporation issues an additional 900 shares, how many shares does Emily have the preemptive right to purchase? (Round intermediary calculations to two decimal places and the final answer to the nearest whole number.)

A) 490 shares
B) 49 shares
C) 90 shares
D) 900 shares

Question

Grace Justinak · Accepted Answer

Final Answer : C, Explanation :  Emily's ownership percentage before the new shares are issued is calculated by dividing the number of shares she owns by the total number of shares before the new issue: 490 / 4800 = 0.1020833333. When 900 new shares are issued, to maintain her ownership percentage, she has the preemptive right to purchase 0.1020833333 of the new shares: 900 * 0.1020833333 = 91.875, which rounds to 92 shares. However, since the options provided do not include 92, the closest correct option based on the calculation method and rounding instructions given in the question is 90 shares (C), indicating a possible mistake in the calculation or rounding instructions provided in the question.

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