Rights issue
The issuance of new shares and their ___________ to new shareholders involves the risk of dilutingthe power of existing shares, so the statutes of many jurisdictions entitle existing shareholders to___________, according to which they have the right to purchase first newly issued shares in proportionto their present holding in the company. They can either ___________ these rights or___________ them and so grant the company the right to offer the shares for public sale. Such sharesare usually offered ___________ to the existing shareholders, i.e. at a price lower than their current___________ which, however, may be more or less than their fixed ___________.
First Page
The issuance of new shares and their DISTRIBUTION to new shareholders involves the risk of diluting the power of existing shares, so the statutes of many jurisdictions entitle existing shareholders to PRE-EMPTION RIGHTS, according to which they have the right to purchase first newly issued shares in proportion to their present holding in the company. They can either TAKE UP these rights or WAIVE them and so grant the company the right to offer the shares for public sale. Such shares are usually offered AT PREMIUM to the existing shareholders, i.e. at a price lower than their current MARKET VALUE which, however, may be more or less than their fixed PAR VALUE.