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Preemptive right

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Definition of Preemptive right

Preemptive Right Image 1

Preemptive right

Common stockholder's right to anything of value distributed by the company.



Related Terms:

Absolute Right of Return

Goods may be returned to the seller by the purchaser without restrictions.


Appraisal rights

A right of shareholders in a merger to demand the payment of a fair price for their shares, as
determined independently.


Conversion Right

Term life insurance products are offered as non-convertible or convertible to a certain time in the future. The coversion right has a time limit, usually to the policy holder's age 60 or possibly even age 70. This right means that the policy holder has the right to convert their existing policy to another specific different plan of permanent insurance within the specified time period, without providing evidence of insurability. There is a slightly higher cost for a term policy with the conversion priviledge but it is a valuable feature should a policy holder's health change for the worst and continued insurance coverage becomes a necessity.
Most often this right is also granted to individuals covered under employee group benefit policies where individuals leaving the employee group have a limited amount of time, usually anywhere from 30 to 90 days, to convert to a specific permanent individual policy without evidence of insurability.


Cum rights

With rights.


Dividend rights

A shareholders' rights to receive per-share dividends identical to those other shareholders receive.



Ex-rights

In connection with a rights offering, shares of stock that are trading without the rights attached.


Ex-rights date

The date on which a share of common stock begins trading ex-rights.


Preemptive Right Image 2

Liquidation rights

The rights of a firm's securityholders in the event the firm liquidates.


Outright rate

Actual forward rate expressed in dollars per currency unit, or vice versa.
Outsourcing
he practice of purchasing a significant percentage of intermediate components from outside suppliers.


Property rights

rights of individuals and companies to own and utilize property as they see fit and to receive
the stream of income that their property generates.


Right

A short-lived (typically less than 90 days) call option for purchasing additional stock in a firm, issued
by the firm to all its shareholders on a pro rata basis.


Right of Return

A sales agreement provision that permits a buyer to return products purchased
for an agreed-upon period of time.


rights issue

Issue of securities offered only to current stockholders.


Rights offering

Issuance of "rights" to current shareholders allowing them to purchase additional shares,
usually at a discount to market price. Shareholders who do not exercise these rights are usually diluted by the
offering. rights are often transferable, allowing the holder to sell them on the open market to others who may
wish to exercise them. rights offerings are particularly common to closed end funds, which cannot otherwise
issue additional common stock.


Rights-on

Shares trading with rights attached to them.


Special drawing rights (SDR)

A form of international reserve assets, created by the IMF in 1967, whose
value is based on a portfolio of widely used currencies.


Preemptive Right Image 3

stock appreciation right

a right to receive cash, stock, or a combination of cash and stock based on the difference between a specified dollar amount per share of stock and the quoted market price per share at some future date


Transferable put right

An option issued by the firm to its shareholders to sell the firm one share of its
common stock at a fixed price (the strike price) within a stated period (the time to maturity). The put right is
"transferable" because it can be traded in the capital markets.



Uniformed Services Employment and Reemployment Rights Act of 1994

A federal act that minimizes the impact on people serving in the Armed Forces
when they return to civilian employment by avoiding discrimination and increasing
their employment opportunities.


Voting rights

The right to vote on matters that are put to a vote of security holders. For example the right to
vote for directors.


With rights

Purchase of shares in which the buyer is entitled to the rights to buy shares in the company's
rights issue.



 

 

 

 

 

 

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