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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
Simone Filippini, Executive Director of the Netherlands Institute for Multiparty Democracy said Tunisia's choice to host the conference on the political rights of women reflects the country's position as a privileged partner of the institute that works to strengthen the presence of women in politics.
ae1/4oeSettlement construction, illegal under international law, is not the only obstacle to a two-state solution, but each new housing unit consolidates a one-state reality in which the Palestinians are denied the full exercise of their political rights.ae1/4Ci
BEIRUT: State Minister for Combating Corruption Nicolas Tueni Wednesday called on citizens to "exercise their political rights freely and not renew the mandate of corrupt politicians in the upcoming elections." Tueni attacked the Cabinet's decision requiring voters to present still-to-be-issued biometric ID cards to cast their ballots at the next elections, stressing "the importance of holding elections, even without the biometric cards if they cannot be implemented [in time]." The minister ruled out the idea that biometric cards could be issued in time for the next elections -- set to be held in spring 2018 -- and suggested that the current polling registration system be kept.
The delegation thanked the Committee for an open and constructive dialogue, responded to the questions and observations of the Committee and reaffirmed Government's commitment to give further impetus to implement the provisions of the Convention in accordance with Pakistan's international human rights obligations and national human rights priorities with regard to advancement of civil and political rights.
Whiteley and Seyd's work on Labour party membership during the last period of significant organisational change (when the rights to leader selection were expanded to individual members) suggests that an expansion in political rights does not lead to an expansion in active support.
The head of the ruling Brazilian Democratic Movement Party (PMDB), Romero Juca, also condemned on Twitter the Senate's vote separating the matter of Rousseff's ouster from her political rights in the years ahead.
The Palestinian leadership is proud of the Palestinian people for their courage, resilience, persistence, and steadfastness, and we will remain undeterred as we continue to pursue their national, legal, historical, and political rights."
The PTI chief said that his party would play its role in providing political rights to people of the province.
Three laws organising political rights were issued to systematise presidential and parliamentary elections: the political rights' law, the parliamentary law, and the division of constituencies' law.
An explanatory note to the document says that in view of Ukraine's inability to protect human rights to the fullest extent in compliance with its obligations under the Convention for the Protection of Human Rights and Fundamental Freedoms, the International Covenant on Civil and Political Rights and the European Social Charter, in its revised version, and in connection with "the objective need to take measures to repel armed aggression of the Russian Federation, Ukraine has to temporarily rescind its commitments to upholding certain human rights (in the zone of military operations) within the limits permitted by relevant international agreements".
Freedom in the World is an annual global report on political rights and civil liberties, composed of numerical ratings and descriptive texts for each country and a select group of related and disputed territories (Freedom House, 2014.
Lack of access to their political rights had kept away from the decision-making processes, especially in elections.

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