Preemptive rights are important to stockholders because they provide protection against a dilution of value when new shares are issued.

Question

Quizplus · Accepted Answer

Preemptive rights allow current stockholders to maintain their proportionate ownership in a company by having the right to purchase new shares before they are offered to the public. This helps prevent the dilution of value of their existing shares.

Preemptive Rights Are Important to Stockholders Because They Provide Protection