The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:

Question

Quizplus · Accepted Answer

The right described in the question is called a preemptive right, which allows common shareholders to maintain their proportional ownership in the corporation by purchasing newly issued common stock before it is offered to the public or to other investors. This helps to prevent dilution of the shareholders' stake in the company. None of the other answer choices accurately describes this right.

The Right of Common Shareholders to Purchase Their Proportional Share