Share Purchase Rights

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DEFINITION

A type of security that gives the holder the option, but not the obligation, to purchase a predetermined number of shares at a predetermined price. This is similar to a stock option or warrant. These rights are typically distributed to existing shareholders, who have the ability to trade these rights on an exchange.

INVESTOPEDIA EXPLAINS

The rights only give shareholders the ability to purchase the shares, but they must still must pay for the shares to redeem the rights.


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