Assertion (A): Under private placement, the company offers the new shares to its existing shareholders in proportion of shares already held by them.
Reason (R): Private placement method helps to raise capital more quickly as compared to public issue.
Reason (R): Private placement method helps to raise capital more quickly as compared to public issue.
Answer & explanation
Correct answer: option 4
Under Rights issue the company offers the new shares to its existing shareholders in proportion of shares already held by them.