What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer?

EduRev

All Courses

Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity

Open App

Commerce Exam > Commerce Questions > What is the meaning of right issue?a)Company ...

Join the Discussion on the App

What is the meaning of right issue?

a)
Company sells the securities to some selected institutions
b)
Company offers new shares to its existing shareholders
c)
Securities are not issued to existing shareholders at all
d)
None of these

Correct answer is option 'B'. Can you explain this answer?

FREE This question is part of

Test: Financial Markets - 2

Attempt Test

Attempt this Test

Verified Answer

What is the meaning of right issue?a)Company sells the securities to s...

b) Company offers new shares to its existing shareholders

A right issue is a type of capital raising event in which a company offers new shares to its existing shareholders. The shareholders are typically given the option to purchase the new shares at a discounted price, and they typically have a certain period of time in which to exercise this option.

A right issue is different from a public offering, in which the company sells new shares to the public, or from a private placement, in which the company sells new shares to a small group of private investors. In a right issue, the new shares are only offered to the company's existing shareholders.

View all questions of this test

View all answers Start learning for free

< Previous Question Next Question >

Explore Courses for Commerce exam

Similar Commerce Doubts

Direction: Read the following text and answer the questions given below:ISQAA SOLAR Limited is searching for options to raise ₹ 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI PVT. LTD. to suggest options for the same. DHAN LAXMI PVT. LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of ₹ 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ₹ 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of ₹ 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise ₹ 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.Q. Identify the reason which has made the firm raise funds from the institutional investors

View answer

Direction: Read the following text and answer the questions given below:ISQAA SOLAR Limited is searching for options to raise ₹ 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI PVT. LTD. to suggest options for the same. DHAN LAXMI PVT. LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of ₹ 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ₹ 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of ₹ 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise ₹ 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.Q. “₹ 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital.’’ Identify the method of floatation of new issues in the primary market being discussed above, which the company has decided to use

View answer

Raj industries limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If right issue price is rs180 per share and the market value is rs200 per share, then the value of a right is A. Rs20. B. Rs180. C.rs200 D.rs40?

View answer

Right issues means selling shares to existing shareholders bearing in mind the pre emptive right of the shareholders. In the light of this, mention any five circumstances under which it would be more beneficial for shareholders to take up the right rather than sell it in whole or in part?

View answer

What is the primary difference between equity shares and preference shares?

View answer

Top Courses for CommerceView all

Chapter Notes for Commerce

Economics Class 12

Economics Class 11

NCERT Books & Solutions for Commerce

Economics for CBSE Class 12 Board Examinations

Top Courses for Commerce

View all

What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer?

Share with a Friend

Answer this doubt

Question Description
What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer?.

Solutions for What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.

Here you can find the meaning of What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice What is the meaning of right issue?a)Company sells the securities to some selected institutionsb)Company offers new shares to its existing shareholdersc)Securities are not issued to existing shareholders at alld)None of theseCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.

Explore Courses for Commerce exam