Subscription Right (Noun)
Meaning
The right of a shareholder in a company to subscribe to shares of a new issue of common stock before it is offered to the public.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company offered its existing shareholders a subscription right to purchase additional shares at a discounted price before the public offering.
- As a shareholder, she had a subscription right that allowed her to buy new shares at a lower price than the general public.
- The investment firm advised its clients to exercise their subscription right to buy more shares of the company, as the stock price was expected to rise after the new issue.
- Under the terms of the subscription right, shareholders could purchase up to 100 additional shares of common stock per share currently owned.
- To exercise the subscription right, shareholders had to complete and return a subscription agreement form to the company by a specified deadline.