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CBA Corporation has an authorized capital stock of 1 Million Pesos divided into 50,000 common...

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Accounting

CBA Corporation has an authorized capital stock of 1 Million Pesos divided into 50,000 common shares and 50,000 preferred shares. At its inception, the Corporation offered for subscription all the common shares. However, only 40,000 shares were subscribed. Recently, the directors thought or raising additional capital and decided to offer to the public all authorized shares of the Corporation at their market value. 


a.Would Mr.X, a stockholder holding 4,000 shares have pre-emptive rights to the remaining 10,000 shares? 


b.Would Mr. X have premptive rights to the 50,000 preferred shares? 


c. Assuming that the existing stockholders are entitled to pre-emptive rights, at what price will the share be offered? 


2. The Board of Directors of BAC Inc., a domestic corporation, passed a resolution authorizing additional issuance of shares of stocks without notice nor approval of the stockholders. DX, a stockholder, objected to the issuance, contending that it violated his right of pre-emption to the unissued shares. Is his contention tenable?

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