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Finance

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  • September 9, 2022
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Ratchet Antidilution

A type of antidilution provision that gives the holder the right to receive enough free shares to reduce its (his/ her) average cost per share to the price paid by the new holder. For example, an investor who purchased 10,000 shares for $5 a share would receive more shares, free of charge, if the company sold stock to new investors for $3 at some future date. The free additional shares will be conferred on the old investor/ holder upon conversion to common shares.


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