The purpose of pPre-emptive rights is to allow shareholders to:

Question

Quizplus · Accepted Answer

Pre-emptive rights allow current shareholders to buy enough of a new securities offering to maintain their present proportional share of ownership. This means that they have the right, but not the obligation, to purchase additional shares before they are offered to the public. Option B is incorrect as pre-emptive rights do not provide for an unlimited amount at a discount, and option C is also incorrect as pre-emptive rights do not pre-empt other stockholders from selling securities in a company.

The Purpose of PPre-Emptive Rights Is to Allow Shareholders To