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 ?
They also tackled the international law in context of the International Court of Justice ruling, with Macedonian rightfully maintaining its position.
Mervyn Kohler, of Help the Aged, said: "Older people who are feeling the pinch should make sure they're doing all they can to get the benefits that are rightfully theirs.
So this Christmas, Prime Minister, do the right thing pay the ASW workers the pensions they so rightfully deserve.
The undercover work is handled quite nicely although the romance between the pair is rightfully kept on the backburner (lovemaking and atheism are not common in foxholes).
When a mysterious box washes up on the beach and a white-haired stranger comes to the village in search of the box, Mouse is wary, and rightfully so.
They rightfully point out that the so-called "study" doesn't stand up to scrutiny.
The notion of Prince Charming is fairy-tale fodder to Lisa Martin, a rightfully bitter 29-year-old on the brink of divorce from a real Jekyll and Hyde.
Ah, technology: It gets the lion's share of credit for most of the productivity increases we've seen in the past few decades, and often rightfully so.
I don't know who wrote the story so that credit could be rightfully given.
In regard to the excessive logging, British Columbia rightfully deserves its reputation as the "Amazon of the North.
While both the Constitution and AU are rightfully committed to opposing the establishment of any religion, removing all references to God in government can be reasonably viewed as establishing an atheistic philosophy.