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

Question

Quizplus · Accepted Answer

The preemptive right allows existing shareholders to maintain their proportional ownership in a company by giving them the first opportunity to purchase additional shares before the company offers them to the public.

The Right of Common Shareholders to Protect Their Proportionate Interest