Methods: Offer For Sales, Offer For Subscription, Right Issues, Private Placement - SS2 Accounting Past Questions and Answers - page 1
Which of the following is a method of raising funds from the capital market where existing shareholders sell their shares to the public?
Offer for sale
Offer for subscription
Rights issue
Private placement
Which of the following is a method of raising funds from the capital market where new shares are issued to the public for the first time?
Offer for sale
Offer for subscription
Rights issue
Private placement
Which of the following is a method of raising funds from the capital market where existing shareholders are given the right to subscribe to new shares?
Offer for sale
Offer for subscription
Rights issue
Which of the following is a method of raising funds from the capital market where securities are sold to a select group of investors?
Offer for sale
Offer for subscription
Rights issue
Private placement
Which of the following is long-term security traded in the capital market?
Treasury bills
Certificates of deposit
Commercial paper
Stocks
What is a prospectus?
A prospectus is a legal document that provides details about a company and the securities being offered to the public. It includes information about the company's financial performance, management team, and business strategy.
Why might a company choose to do a private placement instead of a public offering?
A company might choose to do a private placement instead of a public offering for several reasons, including the desire to maintain control over who invests in the company, the need for a faster and more streamlined fundraising process, or the desire to avoid the costs and regulatory requirements associated with a public offering.