The right that shareholders have to maintain their proportionate ownership in the event of an additional stock offering is best described as the:
A) warrant.
B) cumulative right.
C) pre-emptive right.

Question

Quizplus · Accepted Answer

The pre-emptive right allows existing shareholders to maintain their proportionate ownership in a company by giving them the opportunity to buy additional shares before the company offers them to the public. This helps prevent dilution of their ownership percentage when new shares are issued.

The Right That Shareholders Have to Maintain Their Proportionate Ownership