Asked by Natalia Smart on Jun 01, 2024
Verified
Explain what is meant by pre-emptive rights.
Pre-emptive Rights
The rights granted to shareholders to purchase additional shares in a company before the shares are offered to the public, to maintain their proportionate ownership.
- Acquire knowledge about the rights afforded to shareholders, particularly those holding a minority interest, and the strategies available for their protection and to hold entities accountable.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
Depending on the legislation and the jurisdiction, a shareholder has the right to maintain his percentage of the shares outstanding from a corporation. This means that if new shares are issued, he has to be offered an amount whereby he will maintain his share of the overall shares outstanding if he purchases them.
Learning Objectives
- Acquire knowledge about the rights afforded to shareholders, particularly those holding a minority interest, and the strategies available for their protection and to hold entities accountable.