preemptive right
- noun
- /priˈɛmptɪv raɪt/
- Formal
:
derecho de suscripción preferente
- The preemptive right allows current investors to maintain their ownership percentage by purchasing additional shares.
Examples
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In addition to voting rights, common shareholders sometimes enjoy what are called "preemptive rights."
Blog text (18) -
Existing shareholders can exercise their preemptive right to buy new shares before they are offered to anyone else.
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To protect their investment, many companies grant preemptive rights to shareholders during new stock offerings.
Synonyms
1
8.3
Taking or buying something before others can get it
A choice for people who own shares to buy new shares at a set price before the public
Surface Forms
Morphology
The constituents ('pre-emptive' = taken in advance; 'right' = an entitlement) give a clear general idea: an entitlement exercised in advance to prevent or forestall something. However, the specific legal/financial sense (the shareholder entitlement to buy new shares to avoid dilution) is specialized and not fully predictable from the parts alone, so a typical B1 learner would grasp a vague general sense but not the precise meaning without domain knowledge.
Etymology
Preemptive right comes from the idea of acting before others to protect what you already own: preemptive means doing something first and right means the permission to buy. Imagine a pie shared by people, and new slices are sold — someone with the preemptive right can buy first so their 'share' does not get smaller.