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 ?
However, put them together and tell them to catch dodgy construction worker bang to rights, and they don't half have some clout.
We're up around 40 per cent on disputes involving pickled-brain skiving scams in which some utter clots have been caught bang to rights whooping it up down the local social club, or barging round Primark with their Christmas vouchers, while claiming to their employer they've been enduring weather conditions that Bear Grylls would think twice about tackling.
He said: "We''re up around 40% on disputes involving pickled-brain skiving scams in which some utter clots have been caught bang to rights whooping it up down the local social club, or barging around Primark with their Christmas vouchers, while claiming to their employer they''ve been enduring weather conditions Bear Grylls would think twice about tackling.
It was let off because the EU law hadn't been ratified at the time, but if it did the same today, it would be bang to rights.
The one thing we know for sure is that the French racing authorities reckon they've got him bang to rights, after a drugs test that came up positive not once but twice.
Mike, who dreamed up the Wombles theme tune in 1972, using a foldaway piano on his houseboat in London, fully recalls the day when his Wombling antics almost got him bang to rights.
A GRISLY murder took place in Llangollen - but school student sleuths soon had the culprit bang to rights.
And yet, once again, we have them bang to rights following the news that Merseyside councils will lose up to 5% of the money they need to spend on services - a figure which is nearly double the national average.