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.
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Famous quotes containing the word works:
“I cannot spare water or wine, Tobacco-leaf, or poppy, or rose;
From the earth-poles to the line, All between that works or grows,
Every thing is kin of mine.”
—Ralph Waldo Emerson (1803–1882)