The most important feature of the preemptive right is that the rights
A) may be sold for profit.
B) possibly protect the stockholders' shares against dilution.
C) may accumulate more votes.
D) are nontransferable.

Question

Quizplus · Accepted Answer

The most important feature of the preemptive right is that it possibly protects the stockholders' shares against dilution. This means that the preemptive right gives existing shareholders the right to purchase new shares before they are offered to the public, which helps prevent dilution of their ownership and voting power in the company. The other options (A, C, and D) are not accurate descriptions of the preemptive right.

The Most Important Feature of the Preemptive Right Is That