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Question : Which method of floating capital is highlighted in the statement?
Statement: When an existing company issues new shares first of all it invites its existing shareholders.

Option 1: Offer for sale

Option 2: Private placement

Option 3: Right issue

Option 4: Initial public issue

 


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 9th Jan, 2024

Correct Answer: Right issue


Solution : This method is used by those companies who have already issued their shares. When a company issues new shares, first of all it invites its existing shareholders. This is called the right issue. In this case the shareholder has the right either or accept the offer for himself or assign a part of all of his right in favour of another person.

Hence, option C is correct.

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