Rights Issue
A rights issue is a type of public offering in which a company offers its existing shareholders the right to purchase additional shares in the company at a discounted price. This type of offering is typically used to raise capital for the company and can be used to finance new projects, acquisitions, or other investments. Rights issues are also known as rights offerings or subscription rights.
History of Rights Issues
Rights issues have been used by companies for centuries to raise capital. The first recorded rights issue was in 1783, when the Bank of England issued rights to its existing shareholders to purchase additional shares in the bank. Since then, rights issues have been used by companies around the world to raise capital for various purposes. Rights issues are especially popular in the United Kingdom, where they are commonly used to finance acquisitions and other investments.
Comparison of Rights Issues and Other Types of Offerings
| Type of Offering | Discount | Risk |
|---|---|---|
| Rights Issue | Discounted | Low |
| IPO | No Discount | High |
| Secondary Offering | No Discount | Low |
Summary
Rights issues are a type of public offering in which a company offers its existing shareholders the right to purchase additional shares in the company at a discounted price. This type of offering is typically used to raise capital for the company and can be used to finance new projects, acquisitions, or other investments. Rights issues are especially popular in the United Kingdom, where they are commonly used to finance acquisitions and other investments. For more information about rights issues, please visit the websites of the Financial Conduct Authority, the London Stock Exchange, or the Securities and Exchange Commission.
See Also
- IPO
- Secondary Offering
- Underwriting
- Stock Split
- Dividend
- Share Buyback
- Convertible Bond
- Equity Financing
- Debt Financing
- Venture Capital
