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Tuesday, July 19, 2011

Examples of Rights Issue

Rights issue is an issue of additional shares by a company to raise capital for expansion or to solve a liquidity problem. With the issued rights, existing shareholders have the privilege to buy new shares of a company in proportion to their existing holding, and at a discounted price.

Example 1:
MAA Company has 400,000 $1 ordinary shares as at 30 June 2011. The company decided to make a rights


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