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 ?
Publicity is a noble, beneficent, and universal right.
You have no sort of right to suppose such things," said Lebedeff's nephew in a tone of authority.
SOCRATES: And a person who had a right opinion about the way, but had never been and did not know, might be a good guide also, might he not?
SOCRATES: Then true opinion is as good a guide to correct action as knowledge; and that was the point which we omitted in our speculation about the nature of virtue, when we said that knowledge only is the guide of right action; whereas there is also right opinion.
Who taught him to laugh at whatever is virtuous and decent, and fit and right in the nature of things?
He was so glad to see us he most cried; and called us honey, and all the pet names he could think of; and was for having us hunt up a cold-chisel to cut the chain off of his leg with right away, and clearing out without losing any time.
I said, "Don't do nothing of the kind; it's one of the most jackass ideas I ever struck;" but he never paid no attention to me; went right on.
If you cannot indicate this motion from left to right by yourself moving in it, then I beg you to describe it to me in words.
If you cannot tell your right side from your left, I fear that no words of mine can make my meaning clear to you.
There is also a doubt concerning the pretensions of all those who claim the honours of government: for those who found them either on fortune or family have nothing which they can justly say in their defence; since it is evident upon their principle, that if any one person can be found richer than all the rest, the right of governing all these will be justly vested in this one person.
All these things seem to make it plain, that none of these principles are justly founded on which these persons would establish their right to the supreme power; and that all men whatsoever ought to obey them: for with respect to those who claim it as due to their virtue or their fortune, they might have justly some objection to make; for nothing hinders but that it may sometimes happen, that the many may be better or richer than the few, not as individuals, but in their collective capacity.
The case was evidently this: a position was selected along the river Kolocha- which crosses the highroad not at a right angle but at an acute angle- so that the left flank was at Shevardino, the right flank near the village of Novoe, and the center at Borodino at the confluence of the rivers Kolocha and Voyna.