Answer Posted / krushna chandra swain (guntha
An offer made by a quoted company to its shareholders to
enable them to buy new shares in the company at a discount
to the market price. Existing shareholders are usually
offered shares in proportion to their existing holding. For
example in a one for five rights issue, a shareholder would
be invited to buy one new share for every five shares
already owned. The new shares are offered at a discount to
the current market price and because of that the rights have
a value in themselves and can be sold separately.
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