Cum-rights

A share is trading cum-rights as long as buyers will be entitled to a forthcoming rights issue. Once the share goes ex-rights, buyers will no longer be entitled to receive the rights.

The mechanism is similar to the process by which shares go from being being cum-dividend to ex-dividend. In both cases the data is freely available and published to ensure buyers and sellers know what they are getting.

As with shares going ex-dividend, the price of shares will fall when shares go ex-rights. The calculation of the correction needed to compare cum with ex prices is slightly different.

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