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 grants a shareholder the ability to maintain their current level of ownership should the company opt to issue additional shares of stock is called the preemptive right. With a preemptive right, existing shareholders have the first option to purchase new shares before they are offered to the general public. This ensures that the existing shareholders maintain their proportional ownership in the company.

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