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 periodicals archive ?
He appreciated the NTS system and said whatever little flaws are there they would be set right
He said Iqbal's message of inspiration and motivation provided guidance even for living in the modern era and can help set right direction leading to a successful life.
I want to plea the govt of Punjab and the concerned authorities to set right the healthcare system of Cantonment Hospital Sadder Rawalpindi because when I visited the hospital for a treatment of 14 stitches on my small finger, I observed there was not any up to mark system of healthcare and sterilization.
Reading out Cabinet's decisions, Information Minister Ramzi Jreij said that Premier Salam opened up today's session by reiterating the need to elect a new President as soon as possible in order to set right the work of all constitutional institutions.
The cash is being raised in order to set right issues regarding the bank's capital levels.
Set right at the bottom of Calton Hill with the classic view of Edinburgh broadcast over the world, we are used to a selection journos and TV crews coming in to eat, drink and be merry.
And the skyscrapers set right on the bend of the river, blocking the view of the Three Graces to passengers on the liners and sticking out like sore thumbs.
But the actress is adamant the situation will be set right soon - blaming "events out of my control" for the failure to pay.
By the mind-boggling 12-minute closer Exogenesis, you realise this is not set in the future, it's set right here, right now.
He was a man of the people, a revolutionary who sought to set right the wrongs done to the Welsh people.
That current spring and summer bias needs to be set right.
LAHORE -- Poetry of Dr Allama Mohammad Iqbal (RA), the Poet of the East, provides guidance even for living in the modern era and can help set right direction leading to a successful life.