PRC-3 · Chapter 4 · Question 59 of 65
A private company wants to raise equity capital but wishes to avoid the complex regulations and public scrutiny of an open stock market listing. Instead, it sells its new shares directly to three large pension funds. This process is a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Private placement of shares
Explanation
A placement of shares involves raising capital by selling equity to a small, pre-selected group of private institutional investors rather than the general public.
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