What is Right Entitlement ?
A right is issued by a company to its shareholders on a pre-determined date called the record date. Rights entitlements are offered to shareholders as a ratio to the number of securities held on this record date. A shareholder may refuse to subscribe to the rights issue and just let the 'right' lapse. Alternatively, the shareholder can renounce/trade the entitlement in favour of another person for a price.