Stock Rights Issue



Next video:
Loading the player...

Rights are offers that allow existing stockholders to buy additional shares at a predetermined price, for a set time period. Shareholders do not have to exercise these rights. They could let them expire. Alternatively, they could be traded in the open market
 
Why do companies offer rights? Sometimes tapping existing shareholders may be the best way to raise additional capital if they have difficulty attracting outside investors. For this reason, heavily indebted businesses will sometimes use a rights issue to pay down their obligations.
 

You May Also Like

Related Articles
  1. Active Trading Fundamentals

    Who are GoDaddy's (GDDY) main competitors?

  2. Stock Analysis

    Will This Drug Beat Gilead to Market in NASH?

  3. Stock Analysis

    Energy Transfer Could Learn From Williams Cos.

  4. Stock Analysis

    Is Enterprise Product's Stock a Buy Today?

  5. Stock Analysis

    Can AMD Regain GPU Market Share From NVIDIA?

  6. Stock Analysis

    Whole Foods Isn't Afraid to Leap in New Direction

  7. Stock Analysis

    Eagle Rock Soars on Vanguard Deal

Trading Center