The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:
A)Preemptive right.
B)Proxy right.
C)Right to call.
D)Financial leverage.
E)Voting right.

Question

Quizplus · Accepted Answer

The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a preemptive right. This allows shareholders to maintain their proportionate ownership stake and prevents dilution of their investment.

The Right of Common Shareholders to Purchase Their Proportional Share