Currently, you own 5% of the common stock of Alberta Industries. The right which grants you the ability to maintain your current level of ownership should the company opt to issue additional shares of stock is called the _____ right.

Question

Quizplus · Accepted Answer

The right that allows current shareholders to maintain their proportional ownership in a company when new shares are issued is known as the preemptive right. This means if you own 5% of the company and new shares are issued, you have the right to purchase enough of those new shares to maintain your 5% ownership.

Currently, You Own 5% of the Common Stock of Alberta