Cum Rights

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DEFINITION

A shareholder of record that qualifies for a rights offering declared by a company. Cum rights allow existing shareholders to buy new shares, typically at a price lower than the current market price of the shares in question. Furthermore, the rights themselves have value apart from the value of the existing shares.





INVESTOPEDIA EXPLAINS



After a company has announced that it will be issuing new shares and before such an offering is completed, the question arises: Does the purchaser of existing shares also have the right to take part in the new offering or does that right stay with the seller? Cum rights addresses this situation. What's more, as hinted at above, when a share is cum rights, it means that it includes the right to purchase new issues.








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