The right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional shares of common shares issued by the corporation is called
A)Preemptive right
B)Proxy
C)Right to call
D)Financial leverage
E)Voting right

Question

Quizplus · Accepted Answer

The right described in the question is known as preemptive right. This means that common shareholders have the first option to purchase additional shares of common stock issued by the corporation in order to protect their proportionate ownership in the company.

The Right of Common Shareholders to Protect Their Proportionate Interest