Q536
Right of stockholders of firm that new shares must be offered to existing stockholders first rather than new stock holders is classified as
A.
non-offered rights
B.
pre-emptive rights
AnswerC.
existing rights
D.
securitize rights
Answer: Option B
Solution
Answer: Option B
Solution:
Right of stockholders of firm that new shares must be offered to existing stockholders first rather than new stock holders is classified as pre-emptive rights. Preemptive rights are a clause in an option, security or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate number of shares of any future issue of the security.