The pre-emptive right of shareholders refers to:
A)The right to share proportionally in assets remaining after liabilities have been paid in a
Liquidation.
B)The right to vote on matters of great importance to shareholders, such as a merger, usually
Decided at the annual meeting or a special meeting.
C)The right to share proportionally in dividends paid.
D)The right to share proportionally in any new equity sold.
E)All of the above.

Question

Quizplus · Accepted Answer

The pre-emptive right of shareholders refers to the right to share proportionally in any new equity sold. This means that current shareholders have the option to purchase additional stock before it is offered to the public, in order to maintain their proportional ownership in the company. A, B, and C are rights that shareholders also typically have, but they are not associated with the pre-emptive right specifically.

The Pre-Emptive Right of Shareholders Refers To