The right of current stockholders to purchase any new stock that the corporation issues before it is offered to the general public is called a ____________ right.
A)conversion
B)convertible
C)mandatory
D)preemptive
E)corporate

Question

Quizplus · Accepted Answer

The right of current stockholders to purchase new stock before it is offered to the public is called a preemptive right. This allows current shareholders to maintain their proportional ownership in the company and prevents their ownership percentage from being diluted by new shares being offered to the public.

The Right of Current Stockholders to Purchase Any New Stock