PRC-3 · Chapter 4 · Question 65 of 65
A public company decides to raise additional equity capital. Instead of offering shares to the public, it offers new shares exclusively to its current shareholders in proportion to their existing holdings. This is called a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rights issue
Explanation
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company, usually at a discount, proportional to their existing holding.
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