The preemptive right of shareholders gives a shareholder the ability to prevent the dilution of his/her percentage ownership in the corporation.

Question

Quizplus · Accepted Answer

The statement is true. The preemptive right ensures that existing shareholders have the right to purchase newly issued shares of stock before they are made available to the public. This allows them to maintain their percentage ownership in the corporation and prevents dilution of their ownership.

The Preemptive Right of Shareholders Gives a Shareholder the Ability