The pre-emptive right of an ordinary shareholder is the right to
A)share proportionately in corporate assets upon liquidation.
B)share proportionately in any new issues of stock of the same class.
C)receive cash dividends before they are distributed to preference shareholders.
D)exclude preference shareholders from voting rights.

Question

Quizplus · Accepted Answer

The pre-emptive right allows existing shareholders to maintain their proportional ownership in the company by purchasing a proportional amount of any new stock issuance before it is offered to others.

The Pre-Emptive Right of an Ordinary Shareholder Is the Right