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RIGHTS ISSUE
raagvamd, RaagVamdatt

When a company wants to raise money by issuing more shares ONLY to its existing share holders, it comes up with a rights issue. In a rights issue, the existing share holders get the right to buy a certain number of new shares depending on their existing share holding.

Usually, companies price the rights issue at a price lower than the current market price of the stock to make it attractive for the buyers.

Related Terms: Initial Public Offering, IPO
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