Question

What is allotment of shares? (Answer in one sentence)

Answer 1

Heya

the issuing of new shares to either existing or new shareholders should not be confused with a share transfer, which involves the transfer of existing shares.

Plz mrked it as brainliest

Answer 2

The process of creation and subsequent issuing of shares by any business firm is referred to as allotment of shares.

There can be two methods for allotment of shares:

1. Selling shares to selected private investors- mainly done for raising capital. This is known as private placement of shares.

It takes place in case of pension funds, mutual funds, etc.

2. Right issue of shares- Selling new shares to the existing shareholders of the firm. This can be done on the basis of preference.