Reasons for Companies to Issue Rights Offering

A company can raise capital by providing the right for its existing shareholders. Existing shareholders can subscribe to newly issued shares in proportion to their existing holdings. A company may use this extra capital to meet its current financial obligations.

A right issue of shares (rights offering) is where a company provides an offer to their existing shareholders to purchase additional shares at a discounted price on a particular ratio proportionate to their existing shareholding.

Learn more about Right Issue of Shares,

• What is the Right Issue of Shares?
• Why companies conduct the Right Issue of Shares?
  
  
• What is the benefit for the shareholders to subscribe to the Rights Issue of Shares?
• Why should a shareholder be careful about subscribing to a right issue?
  
  
• Benefit for the company to conduct the Right Issue of Shares?
• Rights Issue Example
• What Happens to the Share Price after the Right Issue?
  
  
• Advantages of Right Issue of Shares
• Disadvantages of Right Issue of Shares