State any two methods of issue of shares
Answers
Answer:
Some of the major methods of issuing corporate securities are as follows: 1. Public Issue or Initial Public Offer (IPO)
2. Private Placement
3. Offer for Sale
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Answer:
Some of the major forms of issuing corporate securities exist as follows:
- Public Issue or Initial Public Offer (IPO)
- Private Placement
Explanation:
Shares exist as units of equity ownership in a corporation. For some companies, shares exist as a financial asset furnishing for an equal distribution of any residual profits, if any are declared, in the form of dividends. Shareholders of a stock that spends no dividends do not participate in the distribution of profits.
Some of the major forms of issuing corporate securities exist as follows:
- Public Issue or Initial Public Offer (IPO)
- Private Placement
- Offer for Sale
- Sale through Intermediaries
- Sale to Inside Coterie
- Sale through Managing Brokers
- Privileged Subscriptions.
Public Issue or Initial Public Offer (IPO)
Under this method, the company issues a prospectus to the public inviting requests for a subscription. The investors who exist are interested in the securities involved and the securities they are willing to buy. Advertisements exist also issued in the leading newspapers. Under the Company Act, a public limited company must issue a prospectus or file a piece of information instead of a prospectus with the Registrar of Companies.
Private Placement
In this method, the issuing company sells its securities privately to one or more institutional brokers who in turn trade them to their clients and associates. This method exists quite convenient and economical. Moreover, the company brings the money quickly and there is no risk of non-receipt of minimum subscription.
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