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Business Terms

Rights issue

Definition

New stock (share) issue offered to existing stockholders (shareholders) in proportion to their current stock/shareholding, for a specified period and at a specified (usually discounted) price. Its objective is to afford them the opportunity to maintain their percentage of ownership of the firm. See also scrip issue.

Rights issue is in the Accounting & Auditing, Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.

rights issue appears in the definitions of the following terms: rights offering, subscription price, rights letter, with rights, junior issue.

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Term of the Day - expiration date

The date on which an option, right or warrant expires, and becomes worthless if not exercised. For stock options, this is the third Saturday of the month in which the contract expires, or the third Thursday of the month if the third Friday is a holiday.

The date on which an agreement is no longer in effect.

Residual value

Definition 1

Estimated present value of the after-tax cash flow expected to be earned after the forecast period.

Definition 2

Estimated fair market value of a leased asset at the end of the lease term.

Definition 3

Estimated scrap value of an asset at the end of its economic or useful life.

Definition 4

Estimated value of a firm at the point where its owners will earn only the minimum required rate of return.

Residual value is in the Accounting & Auditing subject.

residual value appears in the definitions of the following terms: salvage value, depreciable cost, discounted future earnings method, asset and terminal value.

Term of the Day - forward deal

A transaction consisting of a purchase or sale (often of foreign currency) with settlement to occur at a specified future date. Such a transaction will state the specific amount of the asset...