Preemptive rights entitle shareholders to bring a derivative suit against the corpora?tion.

Question

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Preemptive rights allow shareholders to purchase additional shares of stock before they are offered to the public, but they do not give shareholders the right to bring a derivative suit against the corporation. A derivative suit is a legal action brought by a shareholder on behalf of the corporation against individuals or entities that have harmed the corporation. Shareholders may bring a derivative suit if they believe the corporation's management is not acting in the best interests of the corporation or is engaging in illegal or unethical behavior. However, preemptive rights have no direct connection to derivative suits.

Preemptive Rights Entitle Shareholders to Bring a Derivative Suit Against