SUBSCRIPTION RIGHT Meaning and
Definition
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A subscription right refers to a financial instrument that grants existing shareholders the opportunity to purchase additional shares of a company's stock before they are made available to the public. It gives shareholders the right, but not the obligation, to acquire more shares in proportion to their existing holdings. This privilege is usually offered as a way to raise capital for the company through a rights offering.
Subscription rights are typically issued by companies when they are in need of additional funding and want to offer existing shareholders the chance to maintain their proportional ownership in the company. These rights are generally available for a limited period of time and can be exercised by shareholders by paying a specified subscription price.
The subscription price is often set at a discount to the prevailing market price of the stock, making it an attractive proposition for existing shareholders. It provides them with an opportunity to increase their investment and potentially accumulate more shares at a lower cost. However, if shareholders do not wish to exercise their subscription rights, they can choose to sell or transfer them to other investors in the secondary market.
Overall, subscription rights serve as a means for companies to raise capital from existing shareholders, while also ensuring fairness and maintaining proportional ownership among shareholders who choose to take advantage of the opportunity.
Common Misspellings for SUBSCRIPTION RIGHT
- aubscription right
- zubscription right
- xubscription right
- dubscription right
- eubscription right
- wubscription right
- sybscription right
- shbscription right
- sjbscription right
- sibscription right
- s8bscription right
- s7bscription right
- suvscription right
- sunscription right
- suhscription right
- sugscription right
- subacription right
- subzcription right
- subxcription right
Etymology of SUBSCRIPTION RIGHT
The word "subscription right" can be examined in terms of its individual components:
1. Subscription: The word derives from the Latin term "subscriptio", which means "signing underneath". It entered the English language around the early 15th century and originally referred to the act of signing one's name at the end of a document as an indication of consent or agreement.
2. Right: The term "right" has its roots in Old English, where it is derived from the word "riht", meaning "just, good, fair, proper". The evolution of the word led to its current usage, describing entitlement, permission, authorization, or the lawful claim to something.
When both these terms are combined to form "subscription right", it refers to the privilege or entitlement granted to existing shareholders of a company that allows them to purchase additional shares or securities in proportion to their existing holdings before they are offered to the general public.
Similar spelling word for SUBSCRIPTION RIGHT
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