In a standby commitment, what period is typically allowed for the rights offering?

In a standby commitment, the period allowed for the rights offering typically falls within a two to four weeks timeframe. This period is designed to give existing shareholders a reasonable amount of time to decide whether to exercise their rights to purchase additional shares at a specified price. The duration is important because it balances the need for companies to raise capital with the need to protect the interests of current shareholders by allowing them sufficient opportunity to act.

A shorter timeframe, such as one to two weeks, might not give shareholders adequate notice to evaluate their options and make informed decisions. Conversely, a longer timeframe, such as three to six weeks or one month, could unnecessarily delay the capital-raising process, which is a key motivation for the company conducting the rights offering. Thus, the two to four weeks period aligns with industry practices and serves both the issuer's and shareholders' needs effectively.