The articles of incorporation can provide that existing shareholders may buy new issues of stock in the same proportion as their current holdings.This is done to allow the current stockholders to keep the same voting and dividend rights they had before the new issue.This right is known as a right of:

Question

Quizplus · Accepted Answer

A right of preemption, also known as a right of first offer, gives existing shareholders the opportunity to maintain their current ownership percentage by purchasing new shares before they are offered to outside investors. This allows them to retain their voting and dividend rights and can prevent dilution of their ownership interest.

The Articles of Incorporation Can Provide That Existing Shareholders May