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

C. existing rights

D. securitize rights

Answer: Option B

Solution(By Examveda Team)

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.