How It Works
A rights issue is directly offered to all shareholders of record or through broker dealers of record and may be exercised in full or partially. Subscription rights may either be transferable, allowing the subscription-rightsholder to sell them privately, on the open market or not at all. A rights issue to shareholders is generally made as a tax-free dividend on a ratio basis (e.g. a dividend of one subscription right for one share of Common stock issued and outstanding). Because the company receives shareholders' money in exchange for shares, a rights issue is a source of capital in an organisation.
Read more about this topic: Rights Issue
Famous quotes containing the word works:
“Again we mistook a little rocky islet seen through the “drisk,” with some taller bare trunks or stumps on it, for the steamer with its smoke-pipes, but as it had not changed its position after half an hour, we were undeceived. So much do the works of man resemble the works of nature. A moose might mistake a steamer for a floating isle, and not be scared till he heard its puffing or its whistle.”
—Henry David Thoreau (1817–1862)