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 ?
It is noteworthy that as he went downstairs he still imagined that his case was perhaps not utterly lost, and that, so far as the ladies were concerned, all might "very well indeed" be set right again.
As on the ruined human wretch vermin parasites appear, so these ruined shelters have bred a crowd of foul existence that crawls in and out of gaps in walls and boards; and coils itself to sleep, in maggot numbers, where the rain drips in; and comes and goes, fetching and carrying fever and sowing more evil in its every footprint than Lord Coodle, and Sir Thomas Doodle, and the Duke of Foodle, and all the fine gentlemen in office, down to Zoodle, shall set right in five hundred years--though born expressly to do it.
The wrong you have done me is not to be set right in that way," he said.
This matter was soon set right, and as his muscles relaxed and he drew a long breath he felt keenly enough the ludicrousness of the incident.
It has already caused a vast amount of trouble to your friends; and I own I shall not be very well contented until it is set right.
You must do so now, or do more harm to others than you can ever set right.
M'Choakumchild reported that she had a very dense head for figures; that, once possessed with a general idea of the globe, she took the smallest conceivable interest in its exact measurements; that she was extremely slow in the acquisition of dates, unless some pitiful incident happened to be connected therewith; that she would burst into tears on being required (by the mental process) immediately to name the cost of two hundred and forty-seven muslin caps at fourteen-pence halfpenny; that she was as low down, in the school, as low could be; that after eight weeks of induction into the elements of Political Economy, she had only yesterday been set right by a prattler three feet high, for returning to the question,
Well, madam, unless it is set right it may certainly have a very unfortunate effect.
She set right the few defects in her costume, and returned to the cab.
All the people look towards him while he settles causes with true judgements: and he, speaking surely, would soon make wise end even of a great quarrel; for therefore are there princes wise in heart, because when the people are being misguided in their assembly, they set right the matter again with ease, persuading them with gentle words.
For Heaven's sake, let us examine sacredly whether there is any wrong entrusted to us to set right.
By resolving not to set right the wrong he did you.