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
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.
Question : Which method of floating capital is highlighted in the statement? Statement: This method is he should buy those companies who have already issued their shares.
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.
Question : Which method of floating capital is highlighted in the statement? Statement: Advantage of doing this is that the issuing company feels free from tedious work of making a public issue.
Question : Which method of floating capital is highlighted in the statement? Statement: The company sell security to the institutional investors or broker instead of selling them to the general public.
Question : Which of the following statement is incorrect?
Option 1: Company issues capital to public through online system of stock exchange is known as private placement of shares.
Option 2: Company offers the new shares to existing shareholders in proportion of shares already held by them is known as rights issues
Option 3: Company invites public to apply for its securities through issues of prospectus it is known as offer through prospectus.
Option 4: None of the above
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile