Appraisal Right

Dictionary Says

Definition of 'Appraisal Right'

The statutory right of a corporation's minority shareholders to have a fair stock price be determined by a judicial proceeding or independent valuator, and the obligation for the acquiring corporation to repurchase shares at that price. An appraisal right is a protection policy for shareholders, preventing corporations involved in a merger from paying less than the company is worth to the shareholders.
Investopedia Says

Investopedia explains 'Appraisal Right'

Multiple valuation methods are often used in determining the fair stock price and value of the acquired company, including asset-based methods, income or cash flow methods, comparable market data models, and hybrid or formula methods. While most occurrences of appraisal rights are based on consolidation or mergers, it may also apply to instances when the corporation takes any extraordinary action that shareholders deem harmful to their interests. In mergers and acquisitions, appraisal rights guarantee that shareholders are adequately compensated for being overridden in a merger or acquisition.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Acquisition

    A corporate ...
  2. Appraisal

    A valuation of ...
  3. Merger

    The combining of ...
  4. Takeover

    A corporate ...
  5. Appraisal Approach

    A procedure for ...
  6. Minimum Wage

    The minimum ...
  7. Cum Rights

    A shareholder of ...
  8. Sticky Wage Theory

    An economic ...
  9. Corporate Finance

    1) The financial ...
  10. Golden Boot

    An inducement or ...

Articles Of Interest

  1. Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  2. What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  3. Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.
  4. Mergers & Acquisitions: An Avenue For Profitable Trades

    When major corporate transactions have a big impact on the currency markets, you can benefit.
  5. What is the difference between a merger and a takeover?

  6. Carl Icahn's Investing Strategy

    Buying up failing investments and turning them around helped to create the "Icahn lift" phenomenon.
  7. Finding Solid Buy-And-Hold Stocks

    Find out how to look at the big picture - even when the market's short-term outlook is less than rosy.
  8. Female Managers Can Raise Share Values

    Women are quite capable of proving their worth in raising corporate value through various financial, managerial and human capabilities.
  9. Introduction To Incentive Stock Options

    Here are some basic highlights of how ISOs work and the ways they can be used.
  10. Beware Of Company Stock In Qualified Plans

    While this strategy does have a few advantages, it can also pose some substantial risks to employees.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center