Final answer:
Original shareholders usually have preemptive rights to subscribe to new shares in proportion to their existing holdings when a corporation issues new stock. This right is important for shareholders who wish to maintain their percentage of ownership and avoid dilution.
Step-by-step explanation:
When a corporation issues new stock, the original shareholders have specific rights that can affect their ownership and control within the company. One right that the original shareholders have is the preemptive right, also known as the subscription right. This right allows shareholders to purchase new shares of stock before the company offers them to the public, allowing shareholders to maintain their proportional ownership of the company. So, regarding the options provided in the question:
- Right to vote on the new stock issuance - Shareholders typically have the right to vote on major corporate decisions, including stock issuance, depending on the company's bylaws.
- Right to purchase additional shares at a discount - Sometimes, but not always, companies may offer shares at a discount to existing shareholders during a rights offering.
- Right to subscribe to additional shares in proportion to their present holding - This is the preemptive right, which is commonly granted to shareholders to prevent dilution of their ownership.
- Right to sell their existing shares - Shareholders always have the right to sell their existing shares, but this is not specifically related to the issuance of new stock.
It's important to note that the specifics can vary depending on the corporate charter, applicable laws, and any agreements among shareholders. Shareholder agreements or corporate policies may also influence these rights.