Products & Their RisksQuestion 11 of 398
A shareholder wants to maintain the same percentage ownership after a company issues new shares. Which right supports this goal?
a.Preemptive right
b.Cumulative dividend right
c.Conversion right
d.Right of redemption
Explanation
A preemptive right lets existing shareholders buy a proportional amount of newly issued shares before others, preserving their percentage ownership and preventing dilution. Cumulative dividends, conversion, and redemption relate to income or exchange features, not ownership percentage.
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