Pre-emption Rights
Content
Definition
Pre-emption Rights give existing shareholders the right to buy additional shares before the company offers them to new investors, protecting against dilution of ownership.
Usage and Context
Pre-emption rights let existing shareholders buy new shares before others.
Frequently asked questions
- What are the pre-emption rights of existing shareholders? Pre-emption rights allow existing shareholders to buy additional shares before the company offers them to new investors.
- How does the preemptive right protect shareholders from dilution? Preemptive rights allow shareholders to buy additional shares before new investors, maintaining their ownership percentage.
- Do pre-emptive rights enable stockholders to purchase additional shares before new shares are offered to the public? Yes, pre-emptive rights allow stockholders to buy additional shares before they are offered to the public.
Benefits
Pre-emption rights allow existing shareholders to buy new shares before they are offered to others, preventing dilution.
Conclusion
Pre-emption Rights allow existing shareholders to buy new shares before others.
