A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Name: A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.
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Question

Quizplus · Accepted Answer

This is correct definition of a preemptive right. It allows shareholders to maintain their percentage of ownership in a company by purchasing additional shares before they are offered to the public.

A Preemptive Right Means Shareholders Can Purchase Their Proportional Share