Legal Definitions - cum rights

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.