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 ?
They would feel that they could trust him; that the nephew who had done rightly by his father, would do rightly by them; for they know, as well as he does, as well as all the world must know, that he ought to pay this visit to his father; and while meanly exerting their power to delay it, are in their hearts not thinking the better of him for submitting to their whims.
Sancho regarded Don Quixote earnestly while he was giving him this rating, and was so touched by remorse that the tears came to his eyes, and in a piteous and broken voice he said to him, "Master mine, I confess that, to be a complete ass, all I want is a tail; if your worship will only fix one on to me, I'll look on it as rightly placed, and I'll serve you as an ass all the remaining days of my life.
Homer, admirable in all respects, has the special merit of being the only poet who rightly appreciates the part he should take himself.
And if this be rightly considered, he will be seen to have been much more merciful than the Florentine people, who, to avoid a reputation for cruelty, permitted Pistoia to be destroyed.
As to Henry C-, the next in age and wisdom of our band, he had broken loose from the unyielding rigidity of his family, solidly rooted, if I remember rightly, in a well-to-do London suburb.
Therefore measure not thine advancements, by quantity, but frame them by measure: and defer not charities till death; for, certainly, if a man weigh it rightly, he that doth so, is rather liberal of another man's, than of his own.
Tess was woman enough to realize from their avowals to herself that Angel Clare had the honour of all the dairymaids in his keeping, and her perception of his care to avoid compromising the happiness of either in the least degree bred a tender respect in Tess for what she deemed, rightly or wrongly, the self-controlling sense of duty shown by him, a quality which she had never expected to find in one of the opposite sex, and in the absence of which more than one of the simple hearts who were his house-mates might have gone weeping on her pilgrimage.
For which reason others endeavour to procure other riches and other property, and rightly, for there are other riches and property in nature; and these are the proper objects of economy: while trade only procures money, not by all means, but by the exchange of it, and for that purpose it is this which it is chiefly employed about, for money is the first principle and the end of trade; nor are there any bounds to be set to what is thereby acquired.
If the aim of the Russians consisted in cutting off and capturing Napoleon and his marshals- and that aim was not merely frustrated but all attempts to attain it were most shamefully baffled- then this last period of the campaign is quite rightly considered by the French to be a series of victories, and quite wrongly considered victorious by Russian historians.
We must have our fingers upon the pulse of the community; we want to know what people all over England are thinking; we want to put them in the way of thinking rightly.
The Wolf, being thus fearfully mauled, said, "I am rightly served, for why did I attempt the art of healing, when my father only taught me the trade of a butcher?
Unacquainted with grief, I knew not how to appraise my bereavement; I could not rightly estimate the strength of the stroke.