Target Exam

CUET

Subject

Entrepreneurship

Chapter

Resource Mobilisation

Question:
__________issue is a method of raising additional finance from existing shareholders by offering securities to them on a pro-rata basis i.e. giving them a right to a certain number of shares in proportion to the shares they are holding.
Options:
Initial offer
Private placement
Rights issue
Offer to employees
Correct Answer:
Rights issue
Explanation:
rights issues are proposed to the existing shareholders and in case they are not willing to subscribe, they can renounce the same in favour of another person