Which of the Following Statements Is CORRECT

Multiple Choice

Which of the following statements is CORRECT?

A) the preemptive right gives stockholders the right to approve or disapprove of a merger between their company and some other company.
B) the preemptive right is a provision in the corporate charter that gives common stockholders the right to purchase (on a pro rata basis) new issues of the firm's common stock.
C) the stock valuation model, p0 = d1/(rs σ g) , cannot be used for firms that have negative growth rates.
D) the stock valuation model, p0 = d1/(rs σ g) , can be used only for firms whose growth rates exceed their required returns.
E) if a company has two classes of common stock, class a and class b, the stocks may pay different dividends, but under all state charters the two classes must have the same voting rights.