You own 10 percent of the shares of common stock currently held in Zeerocks Corporation. At the most recent meeting, the board of directors authorized the sale of 100,000 new shares of stock to raise funds. As an existing stockholder, you may have a _____ to buy up to 10,000 shares of the new stock before it is offered to the public.

Question

Quizplus · Accepted Answer

The right to buy new shares of stock before they are offered to the public is called a preemptive right. This allows existing shareholders to maintain their proportional ownership in the company and avoid dilution of their shares. The other options given do not accurately describe this type of right.

You Own 10 Percent of the Shares of Common Stock