Rights offering
Rights offering is an offering that occurs when a corporation sells a new issue of common stock to its existing stockholders. Each stockholder receives a certificate, called a stock purchase right, giving the stockholder the option to purchase a specified number of the new shares. The rights are issued in proportion to the amount of stock that each shareholder currently owns.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Rights offering. Occurs when a corporation sells a new issue of common stock to its existing stockholders. Each stockholder receives a certificate, called a stock purchase right, giving the stockholder the option to purchase a specified number of the new shares. The rights are issued in proportion to the amount of stock that each shareholder currently owns.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
