The shareholders of Xyzrox have a preemptive right. Xyzorx has decided to sell 1,000,000 new shares of common stock. They currently have 1,000,000 shares outstanding. The preemptive right allows the current Xyzorx shareholders to: sell all of their current shares back to the company at the current market price. purchase 1 share of stock in the new common stock sale for each share they own. convert their current common stock shares into an equal number of preferred stock shares. convert their common stock shares into bonds of an equal value.

Question

The shareholders of Xyzrox have a preemptive right. Xyzorx has decided to sell 1,000,000 new shares of common stock. They currently have 1,000,000 shares outstanding. The preemptive right allows the current Xyzorx shareholders to:

sell all of their current shares back to the company at the current market price.
purchase 1 share of stock in the new common stock sale for each share they own.
convert their current common stock shares into an equal number of preferred stock shares.
convert their common stock shares into bonds of an equal value.

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