Right


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Right

Privilege granted shareholders of a corporation to subscribe to shares of a new issue of common stock before it is offered to the public. Such a right, which normally has a life of two to four weeks, is freely transferable and entitles the holder to buy the new common stock below the public offering price. See: Warrant.

Rights Offering

In stock, the ability of a shareholder to maintain the same percentage of ownership in a company should the company issue more stock by buying a proportional number of shares at or below the market price. This protects the investor from devaluation of his/her shares if the company decides to hold a round of financing. The purchase of this proportional number of shares usually takes place before the new issue is offered to the secondary market, and must be exercised before a certain date (known as the expiration date) if the shareholder is to maintain the same percentage of ownership. Rights offerings or issues are also called subscription rights or simply rights. See also: Anti-dilution provision.

right

A certificate that permits the owner to purchase a certain number of shares, or, frequently, a fractional share of new stock from the issuer at a specific price. Rights are issued to existing stockholders in proportion to the number of shares the stockholders already own. Rights then may be combined with cash to purchase the new shares or they may be sold to other investors. Rights usually have value because they permit the owner to purchase shares of stock at less than the market price. A right is indicated in stock transaction tables by the symbol rt, appearing after the stock's name. Also called stock right, subscription right. See also ex-rights, preemptive right.
Should rights be sold or used?

Rights offerings refer to the right of an investor to maintain his or her percentage ownership in a company when the company decides to issue new stock. Generally the company will do so at a discount to its market price to attract buyers, thus the existing stockholders' rights have value. The decision a rights holder must make is whether to put more money into the stock of this company or to sell the rights in the open market as compensation for the dilution of his or her percentage ownership in the company. TIP: Such a purchase depends completely on the individual's circumstances, goals, prejudices, and objectives—just as in any other stock purchase—and should be approached accordingly.

Thomas J. McAllister, CFP, McAllister Financial Planning, Carmel, IN

Right

The opportunity a corporation gives a shareholder to buy additional shares at a special price for a limited time. Shareholders who don't use their rights can sell them to other investors.
References in periodicals archive ?
fail [left and right arrow] die [left and right arrow] pass
give [left and right arrow] yield [left and right arrow] take
Go to the right and click on "Bill of Rights in the News" to see how the Bill of Rights figures in current news and issues.
It lacked, detractors claimed during the ratification debates in 1787 and 1788, protections for fundamental rights like free speech, religious liberty, jury trials, and due process.
Campbell, representing the Butchers' Benevolent Association, argued that the amendment's Privileges or Immunities Clause secured the right of butchers to pursue their calling without unreasonable interference from the state.
Its analysis finds that in no way could the Second Amendment be properly construed to be anything other than a protection of an individual right.
Rights from Wrongs: A Secular Theory of the Origins of Rights by Alan Dershowitz (New York: Basic Books, 2004), 261 pp.
Thus my right to life is inalienable; for it is not possible to choose to kill me without violating a very important moral principle, namely, that one should not attack a basic human good for the sake of some end (or utility).
Indeed, our legal system does recognize a number of economic rights--notably, the right to a free public education, the right to a public defender in a criminal case, and the right to emergency medical care.
If we begin with the right to life, Islam clearly and unequivocally guarantees that right.
Thus, once a criminal case has been initiated, (5) a defendant has a right to the assistance of counsel at all critical stages (6) of that prosecution.