LO12.3 Explain what a preemptive right is. LO12.4 Explain what is meant by classified stock. LO12.5 Differentiate the primary market from the secondary market. Vesting occurs years later. Dividend reinvestment plans.
Stockholder automatically reinvests dividends in old or new stock.
Direct purchase plans. Employees are allowed to directly purchase stock from the firm. LO12.7 Explain what a red-herring prospectus is. A red herring prospectus is a preliminary prospectus without any price. LO12.8 Explain what a blue sky law is.