Question : Which method of floating capital is highlighted in the statement?
Statement: This method is referred as it is cheaper method of raising funds as compared to a public issue.
Option 1: Offer for sale
Option 2: Private placement
Option 3: Right issue
Option 4: Initial public issue
Correct Answer: Private placement
Solution : Under this method the company sell security institutional investors or brokers instead of selling them to the general public. Then turn sell of security to the selected clients at a higher price. This method is preferred as it it is a cheaper method of raising funds as compared to a public issue.
Hence, option B is correct.