The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors.

Name: The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors.
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Question

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The preemptive right allows existing shareholders the right to maintain their proportional ownership in the company by purchasing new shares before they are offered to the public, but it does not grant them the right to be on the board of directors.

The Preemptive Right Allows Shareholders with Sufficient Shares of Stock