A certificate that permits the owner to purchase a certain number of shares, or, frequently, a fractional share of new stock from the issuer at a specific price. Rights are issued to existing stockholders in proportion to the number of shares the stockholders already own. Rights then may be combined with cash to purchase the new shares, or they may be sold to other investors. Also called
stock right,
subscription right. See also
ex-rights,
preemptive right.