The preemptive right gives the shareholder the right
A) of one vote for each share owned.
B) to give up their vote to another party.
C) to maintain their proportionate ownership in the corporation when new common stock is issued.
D) to sell their share of stock at a premium.

Question

Quizplus · Accepted Answer

The preemptive right allows current shareholders to maintain their proportionate ownership in a corporation when new common stock is issued. This means that if a company issues more shares of stock, current shareholders have the right to purchase enough shares to keep their same percentage of ownership in the company. It does not relate to voting or selling shares at a premium.

The Preemptive Right Gives the Shareholder the Right