asked 182k views
5 votes
A public issue of securities in which securities are first offered to existing shareholders ----Also called a rights offering

asked
User Chynah
by
8.2k points

1 Answer

6 votes

Answer:

The term you are describing is indeed called a "rights offering" or "rights issue." In a rights offering, a company offers its existing shareholders the opportunity to purchase additional shares of the company's stock at a specific price, typically at a discount to the current market price. This allows existing shareholders to maintain or increase their ownership stake in the company.

Rights offerings are a way for companies to raise capital from their existing shareholder base without diluting the ownership stakes of those shareholders who choose to participate. Shareholders are given "rights" that they can either exercise by buying more shares or sell to other investors. It's a way for companies to give their current shareholders the first opportunity to participate in a new issuance of securities.

Step-by-step explanation:

answered
User Vikrant
by
8.6k points
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.