The pre-emptive right enables a shareholder to
A)share proportionately in any new issues of shares of the same class.
B)receive cash dividends before other classes of stock without the pre-emptive right.
C)sell ordinary shares back to the corporation at the option of the shareholder.
D)receive the same amount of dividends on a percentage basis as the preference shareholders.

Question

Quizplus · Accepted Answer

The pre-emptive right allows existing shareholders to maintain their proportional ownership in the company by giving them the opportunity to purchase additional shares before the company offers them to the public.

The Pre-Emptive Right Enables a Shareholder to