ABC Ltd., decided to raise funds by issuing shares. The finance department felt that the company should offer the shares to existing shareholders on a pro-rata basis. Out of the following, identify the method of raising the funds being suggested by the finance department?
a. Public Issue
b. Rights Issue
c. Private Placement
d. Offer to Employees
Answers
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Answer:
Public issue cause when talk about people so media and other supervising take a look at u what ever you are
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Rights Issue is the method of ‘raising the funds’ being suggested by ‘finance department’.
Option: (b)
Explanation:
- The rights issue is a method adopted by the companies for the existing shareholders and the employees to purchase ‘additional new shares’ in the company.
- Here the ‘finance department’ felt that the company offer the shares to ‘existing shareholders’ on a ‘pro-rata basis’.
- This form of offering shares is giving the ‘existing shareholders’ additional securities or rights. This will enable them to purchase new shares.
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