Right of stockholders of firm that new shares must be offered to existing stockholders first rather than new stock holders is classified as

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.