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 ?
Mademoiselle Stangerson had her apartment in the right wing.
At about two-thirds of its length this gallery, at a right angle, joined another gallery following the course of the right wing.
I sprang out of bed; and, pulling on a dressing-gown, followed Lawrence along the passage and the gallery to the right wing of the house.
When Leather-Stocking saw his enemy fairly under headway, as Benjamin would express it, he gave his attention to the right wing of the assailants.
On the right wing of the host, in the centre, or on the left wing, where I take it the Achaeans will be weakest?
Finally, the prince led the right wing, resting on Aunay.
The creature dived for my right wing so quickly that nothing but a sheer drop could have saved me.
Right wing three-quarter missing, indispensable to-morrow.
Kurt and he fell talking of aerial tactics, and presently went down to the undergallery in order that Bert might see the Drachenflieger that the airships of the right wing had picked up overnight and were towing behind them; each airship towing three or four.
The religious right wing still, however, also fantasizes that they represent some kind of American State Church, and thus they continue to dismiss claims for the separation of religious institutions and the government as if being their brand of sectarian Christian was the founders' intention.
Throughout the pages of this controversial book, the author walks the sensitive tight rope of the three most divisive issues in America: Race, Religion, and Politics to make the argument that hate in America towards President Barack Obama is being fueled by the right wing media.
This paper-chasing money pit is steering us to bankruptcy and only now is in a race to see who does it first, his right wing organisation or the right wing supporting banks.