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Preemptive Right

   Also found in: Dictionary/thesaurus, Financial, Wikipedia 0.03 sec.

The privilege of a stockholder to maintain a proportionate share of the ownership of a corporation by purchasing a proportionate share of any new stock issues.

In most jurisdictions, an existing stockholder has the right to buy additional shares of a new issue to preserve Equity before others have a right to purchase shares of the new issue.


preemptive right n. the right of a shareholder in a corporation to have the first opportunity to purchase a new issue of stock of that corporation in proportion to the amount of stock already owned by the shareholder. (See: corporation, stock)


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? References in periodicals archive
10 and its preemptive right to participate in any private placement, by purchasing 1,235,489 units of the $2.
TSX:DW) announced today that the Caisse de depot et placement du Quebec ("CDP"), pursuant to its preemptive right to acquire shares, has subscribed for $9.
When Cedara completed an equity offering of common shares in March 2004, Analogic did not exercise its preemptive right to maintain its ownership interest at 19%.
 
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