The selling of new shares to existing shareholders is referred to as
The selling of new shares to existing shareholders is referred to as
- A) Public issue
- B) Offer for sale
- C) Right issue
- D) Bonus issue
Correct Answer: C) Right issue
Explanation
The question is asking about a specific term related to selling shares in a company. The options provided are Public issue, Offer for sale, Right issue (Correct), and Bonus issue.The correct answer is Option C: Right issue.
A right issue is when a company offers new shares to its existing shareholders. This means that the shareholders have the right to buy these new shares before they are offered to the general public. The purpose of a right issue is usually to raise additional funds for the company or to give existing shareholders the opportunity to increase their ownership in the company.
In contrast, a public issue is when a company offers its shares to the general public for the first time. An offer for sale is when existing shareholders sell their shares to the public. A bonus issue is when a company issues additional shares to its existing shareholders for free.
So, in this question, the correct answer is Option C: Right issue, which refers to the selling of new shares to existing shareholders.