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. Stock Analysis

    Is SodaStream Ready For A Come Back?

  2. Stock Analysis

    Is Union Pacific Still A Good Dividend Stock?

  3. Stock Analysis

    How Will InvenSense Expand Its Gross Margins?

  4. Stock Analysis

    Is It Time To Shun Altria Group?

  5. Stock Analysis

    Free Cash Flow Separates Delta From The Pack

  6. Stock Analysis

    Digital Realty CEO Bill Stein 'Talks SMACC' At Citi Conference

  7. Chart Advisor

    It Might Not Be The Time To Buy Into Steel and Iron

Trading Center