Right

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Related to rights: Miranda rights, Bill of Rights, Natural rights, Constitutional rights

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 ?
Then, holding the brand, he crossed a deep, narrow chasm in the rocks which ran at right angles with the passage they were in, but which, unlike that, was open to the heavens, and entered another cave, answering to the description of the first, in every essential particular.
Put me in possession of the document essential to establish my rights, and the House of the Seven Gables is your own
Nothing was discovered, however, except that, unaccountably, the right hand of the skeleton was gone.
I can stand most any talk o' yourn but your pious talk,--that kills me right up.
Sometimes he would sit backward, with his face to the horse's tail and sides, and then, with a whoop and a somerset, come right side up in his place again, and, drawing on a grave face, begin to lecture Andy in high-sounding tones for laughing and playing the fool.
Mas'r Haley, and me, and Andy, we comes up to de little tavern by the river, and I rides a leetle ahead,--(I's so zealous to be a cotchin' Lizy, that I couldn't hold in, no way),--and when I comes by the tavern winder, sure enough there she was, right in plain sight, and dey diggin' on behind.
Can there not be a government in which the majorities do not virtually decide right and wrong, but conscience?
All men recognize the right of revolution; that is, the right to refuse allegiance to, and to resist, the government, when its tyranny or its inefficiency are great and unendurable.
It was about a humorous lecturer who flooded an ignorant audience with the killingest jokes for an hour and never got a laugh; and then when he was leaving, some gray simpletons wrung him gratefully by the hand and said it had been the funniest thing they had ever heard, and "it was all they could do to keep from laughin' right out in meetin'.
To satisfy my curiosity I went around the block, and, sure enough, as I approached, at a good round speed, he got up and lounged lazily across my path, fouling my course exactly at the right moment to receive all my weight.
Then the old man got to cussing, and cussed every- thing and everybody he could think of, and then cussed them all over again to make sure he hadn't skipped any, and after that he polished off with a kind of a general cuss all round, including a considerable parcel of people which he didn't know the names of, and so called them what's-his-name when he got to them, and went right along with his cussing.
I guessed I wouldn't stay in one place, but just tramp right across the country, mostly night times, and hunt and fish to keep alive, and so get so far away that the old man nor the widow couldn't ever find me any more.