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Simple English definitions for legal terms
cum rights
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A quick definition of cum rights:
Term: Cum Rights
Definition: Cum rights means having the right to purchase additional shares of stock at a certain price. When someone buys cum rights, they are entitled to any rights that have been declared but not yet distributed. This allows them to buy more shares of the stock at a discounted price.
A more thorough explanation:
Definition: Cum rights refers to the entitlement of a stock purchaser to receive declared but undistributed rights, such as the right to purchase additional shares at a predetermined price.
Example: If a company declares a rights offering to its shareholders, a cum rights purchaser of stock will be entitled to participate in the offering and purchase additional shares at the stated price.
Explanation: Cum rights are a type of entitlement that allows stockholders to participate in certain offerings or purchase additional shares at a discounted price. This can be beneficial for investors who want to increase their stake in a company or take advantage of a potential opportunity.