Question

The preemptive right

A. enables a stockholder to retain their ownership interest if additional stock is issued.

B. receive cash dividends after other classes of stock with the preemptive right.

C. sell capital stock back to the corporation at the option of the stockholder.

D. receive unequal amounts of dividends on a percentage basis as the preferred stockholders.

Answer 1

The correct answer to the following question will be Option A.

Step-by-step explanation:

• A shareholder's right and opportunity in such a company to get the first possibility to buy a current concept of this kind of business's stock concerning the number of inventory the shareholder previously holds termed as a Preemptive right.
• It offers the existing shareholders an opportunity to purchase the fresh shares whenever the company issues extra capital to just not dilute current ownership.

Other choices have no relation to the given situation. So choice A is the correct answer to that.