American Liquidators Corporation plans to raise capital by selling new shares; what must they do to maintain shareholders' ownership percentage?

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To maintain shareholders' ownership percentage when a company is raising capital by selling new shares, the corporation can offer stock rights to existing shareholders. This mechanism gives current shareholders the opportunity to purchase additional shares at a predetermined price before the new shares are offered to the public. By doing so, shareholders can maintain their proportional ownership in the company, as they can buy enough shares to offset the dilution caused by the new issuance.

Stock rights ensure that existing shareholders have the first right to buy newly issued shares, which effectively allows them to maintain control and ownership stake if they choose to exercise this right. This action helps to prevent dilution of their investment and preserves their voting power and economic interest in the company.

Other methods mentioned, like offering warrants, performing a stock split, or suggesting existing shareholders double their position, do not directly ensure that current shareholders can maintain their ownership percentage when new shares are issued. Warrants may offer potential future ownership but are not guaranteed. A stock split adjusts the number of shares without affecting ownership percentages, and merely suggesting that shareholders double their position doesn't provide them with a concrete means to protect their ownership against dilution. Therefore, offering stock rights is the most effective and standard approach to ensure current shareholders can maintain their ownership stakes during a new share issuance.

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