Talk:Rights issue

Face value
Why does the example mention face value? What difference does it make what the face value of the share is? 192.118.34.229 (talk) 09:56, 18 December 2008 (UTC) Removed —Preceding unsigned comment added by 192.118.34.229 (talk) 11:43, 23 December 2008 (UTC) I have a doubt. If some people do not subscribe to the rights issue then they loose money as the share prices lower after the issue. So is it compulsary to subscribe it or Optional as stated in the example —Preceding unsigned comment added by 59.144.9.7 (talk) 10:32, 23 April 2010 (UTC)

German link
This article should be linked with the German term "Kapitalerhöhung", not "Bezugsrecht".
 * I completely agree with the comment in German above. In the first sentence of the introduction, there should not be a link to "Secondary Market Offering", but rather to "Follow-on offering". This is due to the fact that any offering made by the company itself, apart from a Initial Price Offering (IPO) is a follow-on one (a stated in both IPO and SPO articles). Pjbalchev1 10:16, 22 April 2007 (UTC)
 * Fixed :-) Regards Bahnemann (talk) 09:04, 11 August 2008 (UTC)

Rights offering example.
I feel that there needs to be some clarification around the 'Mr A had 100 shares at a face value of $10 and a total investment of $10,000, assuming he purchased the shares at $100 per share. Why is he paying $100 for $10 shares? I'm lost. —Preceding unsigned comment added by 217.41.107.13 (talk) 10:57, 4 March 2008 (UTC)

I also dont understand this part. Should this say "...at a face value of $100 and..."? Cheers, some dude, 9.9.2008

Why
So why would one make a Rights Issue rather than just a Secondary Market Offering. What are the advantages to each? —Preceding unsigned comment added by 82.70.152.142 (talk) 21:32, 3 June 2008 (UTC)
 * Secondary offerings offer shares that do already exist, so a company itself gets no cash (but the old shareholder who sells its stake). A rights issue, as part of the capital increases and in particular part of the seasoned equity offerings, is the issuance of "young, new shares" that raise additional cash for the company. Regards, Bahnemann (talk) 09:04, 11 August 2008 (UTC)

actually $100 not the face value of share, $100 includes, $90 premium and $10 face value of share —Preceding unsigned comment added by 112.110.118.173 (talk) 02:00, 12 November 2010 (UTC)

Closed end company retained earnings
"Closed-end companies cannot retain earnings, because they distribute essentially all of their realized income, and capital gains each year." This is not accurate for operating companies--they can retain earnings, eg Berkshire Hathaway, but I believe it's correct for closed-end management companies registered under the Investment Company Act as a management company. Can't tell by context of the article if this is what is being referred to. Dinoshim (talk) 16:44, 11 February 2011 (UTC)

Option value of rights
In the worked example, the article says: "In this example, the price of the right would adjust itself to $100 (ideally)." However, this ignores the time value of the rights as an option. The value should exceed $100 until the expiration date approaches. Brian Tomasik (talk) 20:33, 1 October 2014 (UTC)