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 ?
NHS England says it is important that patients are offered their legal right to choose.
Its president Steven M Wise said: "No one has ever demanded a legal right for a nonhuman animal.
Chidambaram said after the meeting of the Union Cabinet that the government will try to call a special session of Parliament to debate and pass the Bill, which aims at providing the legal right to subsidised food to nearly 67 percent of India's population.
The new law states that " The family will have no legal right to refuse donation".
ON, the gas and electricity company, has made financial threats against the Welsh if they have the legal right to receive bills in Welsh.
7-million of whom are "registered" (meaning they have the legal right to temporary residence in the country).
Does my daughter have a legal right to change the locks?
The legislation gives employees the legal right to ask for time off so they can undertake training, but, crucially, it does not give them the legal right to it.
But ministers will now give patients a legal right to private care - or treatment at another NHS centre if so desired - if this does not happen.
Summary: President Mahmoud Ahmadinejad called on Iran's judiciary to ensure that an Iranian-American journalist jailed for espionage enjoys her legal right to defend herself, the official IRNA news
If you were childless, your spouse or civil partner - even if you were long separated - has a legal right to half your moveable estate (this means everything apart from land and buildings).
In 2004, the Supreme Court threw out Newdow's case, ruling that he does not have the legal right to bring it since he lacks primary physical custody of the girl.

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