Rights issue

A process of issuing new equity shares where they are offered first to existing shareholders in proportion to their existing shareholding.

Existing shareholders have, under law in the UK, pre-emption rights.

This means that they generally have first refusal on the purchase of any new equity shares.

See also

• An introduction to equity capital
• Bonus issue
• Dividend irrelevancy theory
• Headroom
• Initial public offering
• Nil paid
• Open offer
• Option premium
• Placing
• Pre-emption rights
• Theoretical ex-rights price
• Trombone