In a rights issue, what right do existing shareholders have?

In a rights issue, existing shareholders are typically granted the right to purchase new shares before they are offered to other investors. This mechanism is designed to allow current shareholders to maintain their proportional ownership in the company by providing them the opportunity to buy additional shares at a specified price, often at a discount to the market price. The intent is to prevent dilution of their existing ownership stake.

This right of first refusal to new shares is a protective measure for shareholders, ensuring that they can exercise their rights to acquire shares in proportion to their existing holdings. It is an important feature of rights issues that supports the interests of shareholders and helps them avoid being adversely affected by new issuances of shares that could dilute their ownership percentage and control in the company.

The other options do not accurately reflect the nature of rights issues. For instance, exclusive access to executive decisions pertains to governance rather than share issuance, and a guaranteed share price or priority for future issuances does not typically describe the benefits offered in a rights issue. Thus, the correct choice is the one that captures the essence of the rights provided to shareholders in such scenarios.