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How are new shares offered in a rights issue?

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Question

How are new shares offered in a rights issue?

Options

  • Through the stock exchange’s online system

  • In proportion to existing shareholding

  • To institutional investors and selected individuals

  • Through issuing houses and stock brokers

MCQ
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Solution

In a rights issue, new shares are offered in proportion to existing shareholding. An existing shareholder’s holding determines the share of the new offer.

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