ex-rights & cum rights
XYZ Company declared a rights offering whereby shareholders of record on Friday, August 15th were granted 1 right for every 1 common share held. Four rights were required to subscribe for each new XYZ Company common share at a subscription price of $12 per share. The rights expired at the close of business on September 12th. What is the theoretical intrinsic value of the rights on August 11th if XYZ Company shares were trading at $14 per share at that time?
A. $0.40.
B. $2.00.
C. $0.00.
D. $0.50.
老师您好， 请问ex rights 是record date 前一天么吗？ 那cum rights是ex rights前吗？
When a company decides to do a rights offering, they announce a record date to determine the list of shareholders
who will receive the rights, much as they do when they issue a dividend. All common shareholders who are in the
record books on the record date receive rights.
On the business day before the record date, the shares trade ex-rights. This means that anyone buying shares
on or after the ex-rights date is not entitled to receive the rights from the company. Between the date of the
announcement that rights will be issued and the ex-rights date, the stock is said to be trading cum rights. This
term means that anyone who buys the stock is entitled to receive the rights, if they own the stock until at least the
record date.
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