Preemptive rights allow existing shareholders to maintain voting control and protect themselves against the dilution of their ownership.

Question

Quizplus · Accepted Answer

Preemptive rights give existing shareholders the option to purchase new shares before they are made available to the public, allowing them to maintain their percentage of ownership and voting power. This helps protect against dilution of their ownership.

Preemptive Rights Allow Existing Shareholders to Maintain Voting Control and Protect