Answer:
20 new stocks
Explanation:
each stockholder should receive 1 right for every stock that he/she owns, so this particular investor owns 400 rights. Since he/she needs 20 rights to subscribe to 1 new stock, then the total number of stocks that he/she can buy = 400 / 20 = 20.
Many corporations hand out preemptive rights to their stockholders, which means that whenever new stocks are issued, they will be able to purchase them before any outside investor does.
