Tue or False:  As long as the firm is certain that the return on assets will be higher than the interest rate, an issue of debt makes the shareholders better off. 

The preemptive right is important to shareholders because it:

a. protects the current shareholders against a dilution of their ownership interests.
b. allows managers to buy additional shares below the current market price.
c. protects bondholders, and thus enables the firm to issue debt with a relatively low-interest rate.
d. is included in every corporate charter.
e. will result in higher dividends per share.

Arthur Anderson: Why should an auditor make decisions in the public interest rather than in the interest of management or current shareholders

Empirical evidence indicates that the returns to shareholders of the target firm vary significantly from the returns to the shareholders of the acquiring firm. Identify the shareholders that tend to realize the smaller return and provide some possible explanation for these low returns.