Jaykant is holding hundred shares of a company. He has been given a privilege offer to subscribe to a new issue of shares of the same company in proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case.
A)Offer through prospectus
B)Offer for sale
C)Rights issue
D)Private placement

Question

Quizplus · Accepted Answer

The method described is a rights issue, where existing shareholders are given the right to purchase additional shares in proportion to their current holdings, in this case at a 2:1 ratio.

Jaykant Is Holding Hundred Shares of a Company