Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Share Purchase Right

What it is:

A share purchase right is an instrument that entitles the holder to purchase a specified number of shares at a specified price.

How it works (Example):

Offered by an issuing company, a share purchase right gives current shareholders the opportunity to purchase a specific quantity of shares at a favorable discount without obligation. For instance, a share purchase right might offer a current holder 10 additional shares for $500 ($50 per share) rather than the current market price of $70 per share.

Why it Matters:

In order to take advantage of the special price, a holder must receive a share purchase issue and must pay accordingly for the shares in order to receive them.