What's right about rights offerings

As a result of the whipsaw market, several companies over the last year or so have sold equity at prices significantly higher than current prices. And no matter how well financed the sector may be, some companies need to raise more funds. Thus the conundrum: How to raise equity capital without ruffling the feathers of existing investors who bought in at a higher price?

One option is via a rights offering. In other words, go back to your current investors and ask them to pony up more cash. ...