Rights Issues
The issues of new shares to existing shareholders in a fixed ratio to those already held at a price which is generally below the market price of old shares.These are the relatively rare occasions in a company's life when it will create new shares, the proceeds of which will go directly into its bank account, instead of giving a profit [or a losss] to an existing shareholder. The issue of additional equity shares to the existing shareholders on a pre-emptive basis. Typically, the subscription price of rights issue is significantly below the market price of old shares. |
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