Question

he preemptive right is important to shareholders because it a. protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate. b. allows managers to buy additional shares below the current market price. c. protects the current shareholders against a dilution of their ownership interests. d. is included in every corporate charter.

Answer 1

Answer:

c. protects the current shareholders against a dilution of their ownership interests.

Explanation:

In the case when the preemptive right should be significant for the shareholders so it basically protect the present shareholders that are opposed to the dilution with respective to the ownership interest

Therefore the option c is correct

And, the other options seems wrong