Question

The preemptive right gives shareholders the right​ ________. A. to caste one vote for each share owned at the annual meeting of the company B. to give up their vote to another party if they do not attend the annual meeting 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 in the event of liquidation.

Answer 1

The correct answer is letter C.

The preemptive right is a special clause specific to sales contracts that stipulate the right of the seller to read the welfare requirement or the case of the desired supplier. Basically, it is the right of someone to be preferred on terms and conditions with the third party in the acquisition of something.