Question : Which of the following statement is correct? Statement 1:Under Private Placement, the company offers the new shares to its existing shareholders in proportion of shares already held by them. Statement 2: Money market instruments are less risky.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Correct Answer: Statement 1 is false and statement 2 is true.
Solution : Under private placement the company sell security to the institutional investors or brokers instead of selling them to the general public. Then sell securities to selected giands at a higher price this method is preferred as it is cheaper method of raising funds as compared to a public issue.
Hence, option D is correct.
Question : Which of the following statement is correct? Statement 1:Instruments of the money market are close substitutes for money. Statement 2: Discount Finance House of India provides a ready market for money market instruments.
Question : Questions : Equity Shares and Preference Shares
Statement 1: Preference shareholders have higher potential for capital appreciation compared to equity shareholders.
Statement 2: Preference shareholders have voting rights in company decisions.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Statement 1: Equity shareholders have ownership rights and voting power in company decisions.
Statement 2: Equity shareholders do not receive any dividends.
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