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
Correct Answer: Company issues capital to public through online system of stock exchange is known as private placement of shares.
Solution : Company sells the security to some selected institutional investors and individual this method of floatation is known as private placement of shares. Company issues capital to public through online system of stock exchange this method of flotation is known as e-IPOs.
Hence, option A is correct.
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
Question : What is the purpose of an initial public offering (IPO)?
Option 1: To issue debentures
Option 2: To raise funds from existing shareholders
Option 3: To list a company's shares on a stock exchange
Option 4: To merge with another company
Question : A rights issue allows existing shareholders to:
Option 1: Sell their shares at a premium
Option 2: Buy additional shares at a discounted price
Option 3: Trade their shares in the secondary market
Option 4: Receive dividends from the company
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