Question

10. Explain the following terms:

a. Sweat Equity shares
b. Right issue of shares
c. Employees stock option plan(ESOP)
d. Preferential allotment of shares​

Answer 1

Answer:

A)

Sweat equity is a non-monetary benefit that a company's stakeholders give in labor and time, rather than a monetary contribution, that benefit the company. Sweat equity is rewarded in the form of sweat equity shares. These are shares given out by a company in exchange for labor and time rather than a monetary amount.

b) right issue of shares :

rights issue is an invitation to existing shareholders to purchase additional new shares in the company. In a rights offering, each shareholder receives the right to purchase a pro-rata allocation of additional shares at a specific price and within a specific period (usually 16 to 30 days).