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

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

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References in periodicals archive

Drake and Righter have determined that the isotope profile of near-surface osmium closely matches that in ordinary chondrites--a type of meteorite that's bone-dry.

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Bishop Righter had ordained active homosexuals to the priesthood, knowingly and willingly.

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Iker is one of the 10 bishops who brought the charge of heresy to bear on Righter and is very active in fighting the move to ordain non-cellbate homosexuals.

A church divided

"Our parks have either sand or wood chips to provide a cushion below the equipment and we've had a special handicap accessible surface at Pink Hill Park since 1985," said Righter.

Playground safety program maintains high standards: Blue Springs effort pays off

Heather Steans was surprised when Righter pointed out that the agreed-to COLA freeze was absent.

House slips in a salary increase

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Philippines poised to tighten rules on gun ownership

Righter of Grenloch, New Jersey has been recognized as a lifetime Featured Member by Strathmore's Who's Who Worldwide for her outstanding contributions and achievements in the field of education.

Dottie T. Righter Recognized as a Lifetime Featured Member by Strathmore's Who's Who Worldwide Publication

Sources added that the major reasons for revising the PC-I include delay due to the litigation, extension work on the righter link of Jail Road towards Cantt and shifting of facilities and public utilities.

LDA to submit revised PC-I of Signal free corridor

An earthquake with a magnitude of 5.1 points on the Righter scale has shaken the Aegean Sea at 8:33 am Tuesday morning.

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"In a clinical setting, dieticians can counsel patients on the benefits of eating weekly meatless meals and even send out pre-Monday reminders via e-newsletter or social media," Allison Righter, RD with the Center for a Livable Future, said.

Meatless Monday 'helps consumers munch more greens'

The time has never been righter - or riper - for visionary one-offs like Philadelphia oddball Adam Granduciel and his accomplices.

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It's going righter than the moon!" An X Factor e said: "Katy is excited about her mance on the show tonight.

He's Perry supportive