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 classic literature ?
Why, she'd begin to doubt, right away, and imagine a lot of sicknesses and dangers and objections, and first you know she'd take it all back.
I won't waste no time a-cryin', but git your things ready right away, mum," she said heartily, as she wiped her face on her apron, gave her mistress a warm shake of the hand with her own hard one, and went away to work like three women in one.
And when he had finished his song, he spread his wings, and with the chain in his right claw, the shoes in his left, and the millstone round his neck, he flew right away to his father's house.
You said, 'Yes, sure'; and right away knew more about it than him when you wouldn't stand for buying three chronometers.
And when I've finished the ninth time I'm to turn around nine times, from right to left, and then the wish will come true right away.
I must put a cog in his wheel, and do it right away, too.
It seemed abrupt, but I thought maybe the reader wouldn't notice it, because I changed the subject right away to something else.
But his face lit up, right away, for she tossed a pansy over the fence a moment before she disappeared.
Yes, an' he got shot in th' head an' he's in a fix, an' we must see t' him right away.
There is strong reason now to believe that he has got right away, which is a considerable relief to the lonely householders of this district.
Finding the ape-man made no attempt to harm him, the native at last recovered his grasp upon his courage, and, at Tarzan's suggestion, accompanied the white devil back to the village, calling as he went for his fellows to return also, as "the white devil has promised to do you no harm if you come back right away and answer his questions.
I feel as if something mysterious were going to happen right away -- `by the pricking of my thumbs,' " said Anne, as they went up the slope.