A method by which quoted companies on a stock exchange raise new capital, in exchange for new shares. The name arises from the principle of pre-emption rights, according to which existing shareholders must be offered the new shares in proportion to their holding of old shares (a rights offer). For example in a 1 for 4 rights issue, shareholders would be asked to buy one new share for every four they already hold. As rights are usually issued at a discount to the market price of existing shares, those not wishing to take up their rights can sell them in the market

Compare:

bought deal, vendor placing, scrip issue.

See also:

excess shares.

See:

rights letter, renunciation.

• declaration of solvency
• decreasing term assurance
• deductions at source
• deed
• deed of covenant
• deed of partnership
• deep-discount
• deep-gain security
• deep market
• default
• defeasance
• defended takeover bid
• defensive security
• deferred annuity
• deferred coupon note
• deferred credit
• deferred debit
• deferred expense
• deferred income
• deferred ordinary share
• deferred-payment agreement
• deferred pricing
• deferred swap
• deferred taxation
• deficit financing