Match each equity voting mechanism or subscription privilege with its defining operational characteristic.
- Cumulative VotingPermits shareholders to multiply their shares by the number of open board seats and cast all votes for a single candidate.
- Statutory VotingLimits the maximum votes cast for any single candidate to the exact number of shares owned per open board seat.
- Preemptive RightsOffers existing common shareholders a short-term opportunity to purchase new shares below market price to avoid dilution.
- WarrantsGrants holders a long-term option to purchase common stock at a fixed subscription price set above the current market value.
Answer
Cumulative Voting matches with aggregating total votes for a single director candidate; Statutory Voting matches with restricting votes per seat to total shares owned; Preemptive Rights matches with short-term privileges to prevent share dilution; Warrants matches with long-term purchase options priced above market value.
Each equity characteristic aligns with its core legal definition: cumulative voting enables pooling total votes for a single candidate; statutory voting restricts votes per seat to the number of shares owned; preemptive rights provide short-term protection against dilution; and warrants provide long-term purchase rights priced above market value.
Step-by-Step Solution
Key Concept
Equity Securities Shareholder Rights and Instruments