SIE: 1.3.2.7. Preemptive Rights

1.3.2.7. Preemptive Rights

If a corporation decides to issue additional common stock, current stockholders, particularly early investors, may have the right to maintain their share of ownership by purchasing a proportionate amount of the new issue before it is offered to the public. When it is granted, this is called a stockholder’s preemptive right.