The right of current stockholders to purchase additional shares of newly issued stock in order to maintain the same percentage ownership is called:
A) liquidation.
B) preemptive rights.
C) cumulative preference.
D) voting rights.

Question

Quizplus · Accepted Answer

Preemptive rights refer to the right of current stockholders to purchase additional shares of newly issued stock in order to maintain the same percentage ownership. Liquidation refers to the process of selling a company's assets to pay off its debts, cumulative preference refers to a type of preferred stock that accumulates dividends if they are not paid, and voting rights refer to the right of shareholders to vote on important company decisions.

The Right of Current Stockholders to Purchase Additional Shares of Newly