Business and Personal Finance Dictionary

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• RIGHTS OFFERING
  
  In a rights offering, also known as a subscription right, a company offers existing shareholders the opportunity to buy additional shares of company stock at a discount, or less than the price at which those shares will be offered to the public. To act on the offering, you turn over the rights you receive (typically one for each share of stock you own) and the money needed to make the purchase within the required period, often two to four weeks. You don't have to buy the additional shares, and you can transfer your rights to someone else if you prefer. But buying helps you maintain the same percentage of ownership you had in the company before the new shares were issued rather than having that percentage diluted.
  
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