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Finance Dictionary and Glossary of Investment Terms
preemptive right
Definition 1.
The right of current shareholders to maintain their fractional ownership of a company by buying a proportional number of shares of any future issue of common stock. Most states consider preemptive rights valid only if made explicit in a corporation's charter. also called subscription privilege or subscription right.
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Definition 2.
The right of a company's existing common shareholders to have the first chance to purchase shares in a company's future stock issuance.
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