"Preemptive Rights" Means That

question 105

Multiple Choice

"Preemptive rights" means that

• A) existing shareholders can prevent management from issuing additional common stock.
• B) common shareholders can "preempt" preferred shareholders for dividends.
• C) existing shareholders are guaranteed an opportunity to retain their proportional share of ownership.
• D) management can preempt the right of shareholders to receive dividends if earnings are down.

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