Q224
When an existing company offers its shares for sale to the existing shareholders, it is known as ___________.
A.
private placing
B.
bonus issue
C.
rights issue
AnswerD.
offer for sale
Answer: Option C
Solution
Answer: Option C
Solution:
When an existing company offers its shares for sale to the existing shareholders, it is known as rights issue. A rights issue is a way by which a listed company can raise additional capital. However, instead of going to the public, the company gives its existing shareholders the right to subscribe to newly issued shares in proportion to their existing holdings.